Letter of Offer

Please scan this QR Code to view the Letter of Offer September 20, 2024
For Eligible Equity Shareholders only

Our Company was incorporated as "Devipura Balaji Securities & Investments Private Limited" on November 09, 1993, a private limited Company under the Companies Act, 1956 and was
granted the Certificate of Incorporation by the Registrar of Companies, Mumbai. Subsequently, our Company was converted into a public limited company and the name of our Company
was changed to "Devipura Balaji Securities & Investments Limited" on July 20, 1998, vide an amended certificate of incorporation issued by the Registrar of Companies, Mumbai. Devipura
Balaji Securities & Investments Limited acquired K K Financial Services Private Limited on September 13, 2013. Pursuant to which the Company applied for name change to Registrar of
Companies, Mumbai and received a Certificate of Registration approving change in name to ‘Purple Finance Limited’ vide Certificate of Incorporation dated November 26, 2013. The
Hon'ble National Company Law Tribunal, Mumbai Bench vide its Order dated February 15, 2024, has approved the Scheme of Merger by Absorption of Canopy Finance Limited by Purple
Finance Limited and their respective shareholders and creditors. Pursuant to the aforementioned merger, the equity shares of the Company have been listed on BSE Limited w.e.f. June 14,
2024, and on Calcutta Stock Exchange Limited w.e.f. June 18, 2024. For further details of change in name and registered office of our Company, please refer to "General Information"
beginning on page 39 of this Letter of Offer.

Registered Office: Room No. 11, 1st Floor, Indu Chambers 349/353, Samuel Street, Vadgadi, Masjid Bunder (West), Mumbai – 400 003
Corporate Office: 705/706, 7th Floor, Hallmark Business Plaza, Opposite Gurunanak Hospital, Bandra East, Mumbai – 400 051
Contact person: Ruchi Nishar, Company Secretary and Compliance Officer
Telephone: 022-69165100 | E-mail ID: compliance@purplefinance.in | Website: www.purplefinance.in
Corporate Identity Number: L67120MH1993PLC075037

PROMOTERS OF OUR COMPANY: AMITABH CHATURVEDI, MINAL CHATURVEDI, ABHISHEK CHATURVEDI, ASHER FOODS PRIVATE LIMITED AND
SAGUNA MERCANTILE PRIVATE LIMITED
FOR PRIVATE CIRCULATION TO THE ELIGIBLE EQUITY SHAREHOLDERS OF PURPLE FINANCE LIMITED (OUR "COMPANY" OR THE "ISSUER") ONLY
NEITHER OUR COMPANY NOR OUR PROMOTERS HAVE BEEN DECLARED AS A WILFUL DEFAULTER OR A FRAUDULENT BORROWER BY THE RBI OR
ANY OTHER GOVERNMENT AUTHORITY
ISSUE OF UP TO 1,12,04,985* FULLY PAID-UP EQUITY SHARES OF FACE VALUE OF ₹10/- EACH OF OUR COMPANY (THE "RIGHTS EQUITY SHARES") FOR
CASH AT A PRICE OF ₹40/- PER EQUITY SHARE (INCLUDING A PREMIUM OF ₹30/- PER RIGHTS EQUITY SHARE) AGGREGATING UPTO ₹4,481.99 LAKHS#
ON A RIGHTS BASIS TO THE ELIGIBLE EQUITY SHAREHOLDERS OF OUR COMPANY IN THE RATIO OF 1 (ONE) EQUITY SHARE FOR EVERY 3 (THREE)
FULLY PAID-UP EQUITY SHARES HELD BY THE ELIGIBLE EQUITY SHAREHOLDERS ON THE RECORD DATE, THAT IS SEPTEMBER 26, 2024 (THE "ISSUE").
FOR FURTHER DETAILS, PLEASE REFER TO "TERMS OF THE ISSUE" BEGINNING ON PAGE 182 OF THIS LETTER OF OFFER.
#
Assuming full subscription of Equity Shares in the Issue. Subject to finalization of basis of allotment.
GENERAL RISKS
Investment in equity and equity related securities involve a degree of risk and investors should not invest any funds in the Issue unless they can afford to take the risk with such
investment. Investors are advised to read the risk factors carefully before taking an investment decision in the Issue. For taking an investment decision, investors shall rely on their own
examination of our Company and the Issue including the risks involved. The securities being offered in the Issue have not been recommended or approved by the Securities and
Exchange Board of India ("SEBI") nor does SEBI guarantee the accuracy or adequacy of this Letter of Offer. Specific attention of the investors is invited to "Risk Factors" beginning
on page 22 of this Letter of Offer before making an investment in this Issue.
ISSUER’S ABSOLUTE RESPONSIBILITY
Our Company, having made all reasonable inquiries, accepts responsibility for and confirms that this Letter of Offer contains all information with regard to our Company and the Issue,
which is material in the context of the Issue, and that the information contained in this Letter of Offer is true and correct in all material aspects and is not misleading in any material
respect, that the opinions and intentions expressed herein are honestly held and that there are no other facts, the omission of which makes this Letter of Offer as a whole or any such
information or the expression of any such opinions or intentions misleading in any material respects.
LISTING
The existing Equity Shares are listed on BSE Limited ("BSE") and The Calcutta Stock Exchange Limited ("CSE") (together, the "Stock Exchanges"). Our Company has received 'in-
principle' approvals from the BSE and CSE for listing the Rights Equity Shares to be allotted pursuant to this Issue vide letters dated September 13, 2024 and September 17, 2024,
respectively. Our Company will also make applications to the Stock Exchanges to obtain their trading approvals for the Rights Entitlements as required under the SEBI circular bearing
reference number SEBI/HO/CFD/DIL2/CIR/P/2020/13 dated January 22, 2020. For the purpose of this Issue, the Designated Stock Exchange is BSE Limited.
LEAD MANAGER TO THE ISSUE REGISTRAR TO THE ISSUE

Mark Corporate Advisors Private Limited Purva Sharegistry (India) Private Limited

404/1, The Summit Business Bay, 9 Shiv Shakti Industrial Estate,

Sant Janabai Road, Off Western Express Highway, J R Boricha Marg,
Vile Parle (E), Mumbai, Maharashtra, India – 400 057 Lower Parel (E), Mumbai, Maharashtra, 400011
Telephone: +91 22 2612 3207 / 22 2612 3208 Telephone: 022-4961 4132 / 4970 0138
Email: rightsissue@markcorporateadvisors.com Email: support@purvashare.com
Website: www.markcorrporateadvisors.com Website: https://www.purvashare.com/
Investor grievance e-mail: investorgrievance@markcorporateadvisors.com Investor grievance e-mail: newissue@purvashare.com
Contact Person: Mr. Manish Gaur Contact Person: Deepali Dhuri
SEBI Registration No.: INM000012128 SEBI Registration No.: INR000001112

ISSUE PROGRAMME
LAST DATE FOR ON MARKET
ISSUE OPENS ON ISSUE CLOSES ON#
RENUNCIATIONS*
FRIDAY, OCTOBER 04, 2024 TUESDAY, OCTOBER 08, 2024 FRIDAY, OCTOBER 11, 2024
* Eligible Equity Shareholders are requested to ensure that renunciation through off-market transfer is completed in such a manner that the Rights Entitlements are credited to the demat
account of the Renouncee(s) on or prior to the Issue Closing Date.
# Our Board or a duly authorized committee thereof will have the right to extend the Issue period as it may determine from time to time but not exceeding 30 (thirty) days from the Issue
Opening Date (inclusive of the Issue Opening Date). Further, no withdrawal of Application shall be permitted by any Applicant after the Issue Closing Date.
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 TABLE OF CONTENTS

SECTION I - GENERAL ..................................................................................................................................... 1

DEFINITIONS AND ABBREVIATIONS ............................................................................................................. 1
NOTICE TO INVESTORS .................................................................................................................................. 11
PRESENTATION OF FINANCIAL AND OTHER INFORMATION ............................................................... 14
FORWARD LOOKING STATEMENTS ............................................................................................................ 17
SUMMARY OF LETTER OF OFFER ................................................................................................................ 19
SECTION II – RISK FACTORS ...................................................................................................................... 22
SECTION III - INTRODUCTION ................................................................................................................... 37
THE ISSUE .......................................................................................................................................................... 37
GENERAL INFORMATION ............................................................................................................................... 39
CAPITAL STRUCTURE ..................................................................................................................................... 45
OBJECTS OF THE ISSUE .................................................................................................................................. 47
STATEMENT OF POSSIBLE SPECIAL TAX BENEFITS ............................................................................... 50
SECTION IV – ABOUT THE COMPANY ..................................................................................................... 55
INDUSTRY OVERVIEW .................................................................................................................................... 55
OUR BUSINESS .................................................................................................................................................. 76
OUR MANAGEMENT ........................................................................................................................................ 84
OUR PROMOTERS AND PROMOTER GROUPS ............................................................................................ 96
DIVIDEND POLICY ......................................................................................................................................... 101
SCTION V – FINANCIAL INFORMATION ................................................................................................ 102
FINANCIAL STATEMENTS ............................................................................................................................ 102
OTHER FINANCIAL INFORMATION ............................................................................................................ 151
CAPITALISATION STATEMENT ................................................................................................................... 153
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND RESULTS OF
OPERATONS..................................................................................................................................................... 154
MARKET PRICE INFORMATION .................................................................................................................. 169
SECTION VI – LEGAL AND OTHER INFORMATION ........................................................................... 170
OUTSTANDING LITIGATIONS AND MATERIAL DEVELOPMENTS ...................................................... 170
GOVERNMENT AND OTHER STATUTORY APPROVALS ........................................................................ 174
OTHER REGULATORY AND STATUTORY DISCLOSURES ..................................................................... 175
SECTION VII – ISSUE INFORMATION ..................................................................................................... 182
TERMS OF THE ISSUE .................................................................................................................................... 182
RESTRICTIONS ON FOREIGN OWNERSHIP AND INDIAN SECURITIES ............................................... 209
SECTION VIII – SATUTORY AND OTHER INFORMATION ................................................................ 211
MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION ........................................................... 211
DECLARATION ................................................................................................................................................ 213
 SECTION I - GENERAL

DEFINITIONS AND ABBREVIATIONS

This Letter of Offer uses the definitions and abbreviations set forth below, which you should consider when
reading the information contained herein. The following list of certain capitalised terms used in this Letter of
Offer is intended for the convenience of the reader/prospective investor only and is not exhaustive.

This Letter of Offer uses the definitions and abbreviations set forth below, which, unless the context otherwise
indicates or implies, or unless otherwise specified, shall have the meaning as provided below. References to any
legislation, act, regulation, rules, guidelines or policies shall be to such legislation, act, regulation, rules,
guidelines or policies as amended, supplemented, or re-enacted from time to time and any reference to a statutory
provision shall include any subordinate legislation made from time to time under that provision.

The words and expressions used in this Letter of Offer, but not defined herein, shall have the same meaning (to
the extent applicable) ascribed to such terms under the SEBI ICDR Regulations, the Companies Act, 2013, the
SCRA, the Depositories Act, and the rules and regulations made thereunder. Notwithstanding the foregoing, terms
used in sections / chapters titled "Industry Overview", "Statement of Tax Benefits", "Financial Information",
"Outstanding Litigation and Defaults" and "Terms of the Issue" on pages 55, 50, 102, 170 and 182 respectively,
shall, unless indicated otherwise, have the meanings ascribed to such terms in the respective sections/ chapters.

General Terms

Term Description
"Purple Finance Limited" orPurple Finance Limited, a Public Limited Company incorporated under the
"Our Company" or "the Companies Act, 1956 and having its Registered Office at Room no. 11, 1st Floor,
Company" or "the Issuer" orIndu Chambers, 349/353, Samuel Street, Vadgadi, Masjid Bunder (West), Mumbai
“PFL” – 400 003 and Corporate Office at 705/706, 7 th Floor, Hallmark Business Plaza
Opposite Gurunanak Hospital, Bandra East, Mumbai- 400051.
"We", "Our", "Us", or "Our Unless the context otherwise requires, indicates or implies or unless otherwise
Group" specified, our Company

Company Related Terms

Term Description
Articles of Association /The Articles of Association of our Company, as amended from time to time
Articles / AoA
Audit Committee The Board of Directors of our Company constituted Audit Committee in accordance
with Regulation 18 of the Securities and Exchange Board of India (Listing
Obligations and Disclosure Requirements) Regulations, 2015, as amended and
Section 177 of the Companies Act, 2013
Audited Financial Unless stated or the context requires otherwise, our financial data as at and for the
Statements Financial Year ended March 31, 2024, March 31, 2023 and March 31, 2022, included
in this Letter of Offer is derived from the Restated Financial Statements for the
Financial Year ended March 31, 2024, March 31, 2023 and March 31, 2022. For
further information, see "Financial Information" on page 102 of this Letter of Offer.
Auditor / Statutory Auditor The current Statutory Auditor of our Company, namely, M/s. Jogin Raval &
Associates, Chartered Accountants
Board / Board of Directors Board of Directors of our Company including duly constituted committee thereof.
For details of the Board of Directors, see "Our Management" on page 84 of this
Letter of Offer
Chairman Amitabh Chaturvedi, the Chairman of our Board
Chief Financial Officer / Sonal Vira, the Chief Financial Officer of our Company
CFO
Committee(s) Duly constituted committee(s) of our Board of Directors
Company Secretary and Ruchi Nishar, the Company Secretary and the Compliance Officer of our Company

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Term Description
Compliance Officer
Directors Directors on the Board, as may be appointed from time to time
Equity Shareholder / A Holder of Equity Share(s) of our Company, from time to time
Shareholders
Equity Shares Equity shares of face value of ₹ 10/- each of our Company
Executive Directors Executive Directors of our Company
Finance Committee The Committee of our Board of Directors constituted through the Board resolution
dated July 12, 2023
Independent Director(s) Independent Director(s) of our Company as per Section 2(47) of the Companies Act,
2013 and Regulation 16(1)(b) of the SEBI Listing Regulations, and as described in
the chapter "Our Management" on page 84 of this Letter of Offer
Key Managerial Personnel / Key Managerial Personnel of our Company as per the definition provided in Section
KMP 2(51) of the Companies Act, 2013 and Regulation 2(1) (bb) of the SEBI ICDR
Regulations as described in the "Our Management" on page 84 of this Letter of
Offer.
Limited Reviewed Financial The limited reviewed unaudited financial statements for the three months period
Information/ Limited ended June 30, 2024, prepared in accordance with the Companies Act and SEBI
Reviewed Financial Listing Regulations. For details, see "Financial Information" on page 102 of this
Statements Letter of Offer
Materiality Policy Policy for Determination and Disclosure of Materiality of an Event or Information
adopted by our Board in accordance with the requirements under Regulation 30 of
the SEBI Listing Regulations, read with the materiality threshold adopted by the
Board of Directors through its resolution dated July 19, 2024, for the purpose of
litigation disclosures in this Letter of Offer.
Memorandum of The Memorandum of Association of our Company, as amended from time to time.
Association / Memorandum
/ MoA
Nomination and The Board of Directors of our Company constituted Nomination and Remuneration
Remuneration Committee Committee in accordance with Regulation 19 of the Securities and Exchange Board
of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as
amended and Section 178 of the Companies Act, 2013.
Non-executive Director Non-executive Director(s) on our Board, as described in "Our Management" on
page 84 of this Letter of Offer.
Registered Office The registered office of our Company is Room no. 11, 1st Floor, Indu Chambers
349/353, Samuel Street, Vadgadi, Masjid Bunder (West), Mumbai – 400 003.
Registrar of Companies / The Registrar of Companies, Mumbai, Maharashtra.
RoC
Stakeholders' Relationship The Board of Directors of our Company constituted a Stakeholder Relationship
Committee Committee in accordance with Regulation 20 of the Securities and Exchange Board
of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as
amended and Section 178 of the Companies Act, 2013.

Issue Related Terms

Term Description
Abridged Letter of Offer / Abridged Letter of Offer to be sent to the Eligible Equity Shareholders with respect
ALOF to the Issue in accordance with the provisions of the SEBI ICDR Regulations and the
Companies Act, 2013
Additional Rights Equity The Rights Equity Shares applied or allotted under this Issue in addition to the Rights
Shares / Additional Equity Entitlement
Shares
Allotment / Allot / Allotted Unless the context otherwise requires, the Allotment of Rights Equity Shares pursuant
to the Issue
Allotment Account The accounts opened with the Banker(s) to the Issue, into which the Application
Money blocked by Application Supported by Blocked Amount in the ASBA Account,
with respect to successful Applicants will be transferred on the Transfer Date in

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Term Description
accordance with Section 40(3) of the Companies Act, 2013
Allotment Account Bank(s) Bank(s) which are clearing members and registered with SEBI as bankers to an issue
and with whom the Allotment Accounts will be opened, in this case being, ICICI Bank
Limited.
Allotment Advice The note, advice or intimation of Allotment, sent to each successful Applicant who
has been or is to be Allotted the Rights Equity Shares after approval of the Basis of
Allotment by the Designated Stock Exchange
Allotment Date / Date of Date on which the Allotment is made pursuant to the Issue
Allotment
Allottee(s) Person(s) to whom the Rights Equity Shares are Allotted pursuant to the Issue
Applicant(s) or Investors Eligible Equity Shareholder(s) and/or Renouncee(s) who are entitled to apply or make
an application for the Rights Equity Shares pursuant to the Issue in terms of the Letter
of Offer
Application Application made through submission of the Application Form or plain paper
Application to the Designated Branch(es) of the SCSBs or online / electronic
application through the website of the SCSBs (if made available by such SCSBs)
under the ASBA process to subscribe to the Rights Equity Shares at the Issue Price
Application Form / Unless the context otherwise requires, an application form (including online
Common Application Form application form available for submission of application through the website of the
SCSBs (if made available by such SCSBs) under the ASBA process) used by an
Investor to make an application for the Allotment of Rights Equity Shares in the Issue
Application Money Aggregate amount payable at the time of Application in respect of the Rights Equity
Shares applied for in the Issue at the Issue Price.
Application Supported by Application (whether physical or electronic) used by an ASBA Applicants to make an
Blocked Amount / ASBA application authorizing the SCSB to block the Application Money in an ASBA
Account maintained with the SCSB.
ASBA Account Account maintained with the SCSB and as specified in the Application Form or the
plain paper Application, as the case may be, by the Applicant for blocking the amount
mentioned in the Application Form or the plain paper Application.
ASBA Circulars Collectively, SEBI circular bearing reference number
SEBI/CFD/DIL/ASBA/1/2009/30/12 dated December 30, 2009, SEBI circular
bearing reference number CIR/CFD/DIL/1/2011 dated April 29, 2011, SEBI circular
bearing reference number SEBI/HO/CFD/DIL2/CIR/P/2020/13 dated January 22,
2020, SEBI circular bearing reference number SEBI/HO/CFD/SSEP/CIR/P/2022/66
dated May 19, 2022 and any other circular issued by SEBI in this regard and any
subsequent circulars or notifications issued by SEBI in this regard
Banker(s) to the Issue Collectively, the Escrow Collection Bank and the Refund Bank to the Issue, in this
case being ICICI Bank Limited.
Banker to the Issue Agreement dated September 18, 2024 entered into by and among our Company, the
Agreement Registrar to the Issue, the Lead Manager and the Banker(s) to the Issue for collection
of the Application Money from Applicants/Investors making an application for the
Rights Equity Shares
Basis of Allotment The basis on which the Rights Equity Shares will be Allotted to successful Applicants
in consultation with the Designated Stock Exchange under this Issue, as described in
"Terms of the Issue" on page 182 of this Letter of Offer
Book Running Lead Mark Corporate Advisors Private Limited
Manager / BRLM
Controlling Branches / Such branches of the SCSBs which co-ordinate with the Registrar to the Issue and the
Controlling Branches of the Stock Exchange, a list of which is available on
SCSBs http://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognised=yes, updated
from time to time or at such other website(s) as may be prescribed by the SEBI from
time to time.
Demographic Details Details of Investors including the Investor’s address, PAN, DP ID, Client ID,
occupation and bank account details, where applicable.

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Term Description
Designated Branches / Such branches of the SCSBs which shall collect the Application Form or the plain
Designated SCSB Branches paper application, as the case may be, used by the ASBA Investors and a list of which
is available on
http://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognised=yes, updated
from time to time or at such other website(s) as may be prescribed by the SEBI from
time to time.
Designated Stock Exchange BSE Limited
Depository(ies) NSDL and CDSL or any other depository registered with SEBI under the Securities
and Exchange Board of India (Depositories and Participants) Regulations, 2018 as
amended from time to time read with the Depositories Act, 1996.
Draft Letter of Offer / The Draft Letter of Offer dated August 21, 2024, filed with BSE and CSE in
DLOF accordance with SEBI ICDR Regulations
Eligible Equity Existing Equity Shareholder(s) as on the Record Date i.e., September 26, 2024. Please
Shareholder(s) / Eligible note that the investors eligible to participate in the Issue exclude certain overseas
Shareholder(s) shareholders. For, further details, see "Notice to Investors" on page 11 of this Letter
of Offer.
Fraudulent Borrower Fraudulent Borrower as defined under Regulations 2(1) (lll) of the SEBI ICDR
Regulations
Investor(s) Eligible Equity Shareholder(s) of our Company on the Record Date, September 26,
2024, and the Renouncee(s).
Issue Agreement Memorandum of Understanding (MOU) dated August 19, 2024, between our
Company and the Lead Managers, pursuant to which certain arrangements are agreed
to in relation to the Issue.
ISIN International securities identification number i.e., INE0CYK01015
Issue / Rights Issue Issue of up to 1,12,04,985 Rights Equity Shares of face value of ₹10/- each of our
Company for cash at a price of ₹40/- per Rights Equity Share (including a premium
of ₹30/- per Rights Equity Share) aggregating up to ₹4,481.99 Lakhs on a rights basis
to the Eligible Equity Shareholders of our Company in the ratio of 1 (One) Rights
Equity Share for every 3 (Three) fully paid-up Equity Shares held by the Eligible
Equity Shareholders of our Company on the Record Date.
Issue Closing Date Friday, October 11, 2024
Issue Materials Collectively, Letter of Offer, the Abridged Letter of Offer, the Application Form and
Rights Entitlement Letter, any other issue material relating to the Issue
Issue Opening Date Friday, October 04, 2024
Issue Period The period between the Issue Opening Date and the Issue Closing Date, inclusive of
both days, during which Applicants / Investors can submit their Applications, in
accordance with the SEBI ICDR Regulations
Issue Price ₹40/- per Rights Equity Share.
Issue Proceeds/ Gross The gross proceeds raised through the Issue
Proceeds
Issue Size Amount aggregating up to ₹4,481.99 Lakhs#
#
Assuming full subscription with respect to Rights Equity Shares
Letter of Offer / LOF The final Letter of Offer dated Friday, September 20, 2024, to be filed with the Stock
Exchanges and submitted to SEBI
Listing Agreement The listing agreements entered into between our Company and the Stock Exchange in
terms of the SEBI Listing Regulations
Multiple Application Forms Multiple application forms submitted by an Eligible Equity Shareholder / Renouncee
in respect of the Rights Entitlement available in their demat account. However
supplementary applications in relation to further Equity Shares with / without using
additional Rights Entitlements will not be treated as multiple application
Net Proceeds Issue Proceeds less the Issue related expenses. For further details, please refer to
"Objects of the Issue" on page 47 of this Letter of Offer
Non-Institutional Investor / An Investor other than a Retail Individual Investor or Qualified Institutional Buyer as
NII defined under Regulation 2(1) (jj) of the SEBI ICDR Regulations
Off Market Renunciation The renunciation of Rights Entitlements undertaken by the Investor by transferring

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Term Description
them through off-market transfer through a depository participant in accordance with
the SEBI Rights Issue Circulars and the circulars issued by the Depositories, from
time to time, and other applicable laws
On Market Renunciation The renunciation of Rights Entitlements undertaken by the Investor by trading them
over the secondary market platform of the Stock Exchange through a registered stock
broker in accordance with the SEBI Rights Issue Circulars and the circulars issued by
the Stock Exchange, from time to time, and other applicable laws, on or before
Tuesday, October 08, 2024.
Payment Schedule Payment schedule under which entire Issue Price is payable on Application.
Qualified Institutional Qualified institutional buyers as defined under Regulation 2(1)(ss) of the SEBI ICDR
Buyer / QIB Regulations
Record Date Designated date for the purpose of determining the Equity Shareholders eligible to
apply for Rights Equity Shares, being Thursday, September 26, 2024
Registrar to the Issue / Purva Sharegistry (India) Private Limited
Registrar to the Company /
Registrar
Registrar Agreement Agreement dated July 16, 2024, entered into between our Company and the Registrar
to the Issue in relation to the responsibilities and obligations of the Registrar to the
Issue pertaining to the Issue
Refund Bank(s) The Banker(s) to the Issue with whom the Refund Account(s) has been opened in this
case being ICICI Bank Limited
Renouncee(s) Person(s) who has/have acquired Rights Entitlements from the Eligible Equity
Shareholders on renunciation either through On Market Renunciation or through Off
Market Renunciation in accordance with the SEBI ICDR Regulations, the SEBI
Rights Issue Circulars, the Companies Act and any other applicable law
RE ISIN ISIN for Rights Entitlement i.e. INE0CYK20015
Renunciation Period The period during which the Investors can renounce or transfer their Rights
Entitlements which shall commence from the Issue Opening Date i.e. Friday, October
04, 2024. Such period shall close on Tuesday, October 08, 2024, in case of On Market
Renunciation. Eligible Equity Shareholders are requested to ensure that renunciation
through off-market transfer is completed in such a manner that the Rights Entitlements
are credited to the demat account of the Renouncee on or prior to the Issue Closing
Date i.e., Friday, October 11, 2024.
Rights Entitlement(s) / Number of Rights Equity Shares that an Eligible Equity Shareholder is entitled to in
RE(s) proportion to the number of the Equity Shares held by the Eligible Equity Shareholder
on the Record Date, in this case being Thursday, September 26, 2024, would be 1
(One) Equity Share for every 3 (Three) Equity Shares held by an Eligible Equity
Shareholder.

Pursuant to the provisions of the SEBI ICDR Regulations and the SEBI Rights Issue
Circulars, the Rights Entitlements shall be credited in dematerialized form in
respective demat accounts of the Eligible Equity Shareholders before the Issue
Opening Date.

The Rights Entitlements with a separate ISIN will be credited to the respective demat
account of Eligible Equity Shareholder before the Issue Opening Date, against the
Equity Shares held by the Eligible Equity Shareholders as on the Record Date.
Rights Entitlement Letter Letter including details of Rights Entitlements of the Eligible Equity Shareholders.
The Rights Entitlements will also be accessible on the website of our Company and
Registrar
Rights Equity Shares / Equity Shares of our Company to be Allotted pursuant to this Issue
Rights Shares
SEBI Rights Issue Circulars SEBI circular bearing reference number SEBI/HO/CFD/DIL2/CIR/P/2020/13 dated
January 22, 2020, read with SEBI circular bearing reference number
SEBI/HO/CFD/SSEP/CIR/P/2022/66 dated May 19, 2022, and any other circular
issued by SEBI in this regard and any subsequent circulars or notifications issued by

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Term Description
SEBI in this regard.
SCSB(s) / Self-Certified Self-certified syndicate banks registered with SEBI, which offers the facility of
Syndicate Banks ASBA. A list of all SCSBs is available at
http://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognised=yes, updated
from time to time or at such other website(s) as may be prescribed by the SEBI from
time to time.
Stock Exchanges Stock exchanges where the Equity Shares of our Company are presently listed, i.e.,
BSE Limited and Calcutta Stock Exchange Limited
Transfer Date The date on which the Application Money blocked in the ASBA Account will be
transferred to the Allotment Account(s) in respect of successful Applications, upon
finalization of the Basis of Allotment, in consultation with the Designated Stock
Exchange
Wilful Defaulter / Company or person, as the case may be, categorized as a wilful defaulter or a
Fraudulent Borrower fraudulent borrower by any bank or financial institution (as defined under the
Companies Act, 2013) or consortium thereof, in accordance with the guidelines on
wilful defaulters issued by RBI
Working Day(s) In terms of Regulation 2(1)(mmm) of SEBI ICDR Regulations, working day means
all days on which commercial banks in Maharashtra are open for business. Further, in
respect of Issue Period, working day means all days, excluding Saturdays, Sundays
and public holidays, on which commercial banks in Mumbai are open for business.
Furthermore, the time period between the Issue Closing Date and the listing of Equity
Shares on the Stock Exchange, working day means all trading days of the Stock
Exchange, excluding Sundays and bank holidays, as per circulars issued by SEBI.

Business and Industry Related Terms

Term Description
AMCs Asset Management Companies
AMFI Association Of Mutual Funds in India
ARC Asset Reconstruction Company
AUM Assets Under Management
CDBC Central Bank Digital Currency
CICs Central Information Commission
CGTMSE Credit Guarantee Fund Trust for Micro and Small Enterprises
CRAR Capital Adequacy Ratio
FPIs Foreign Portfolio Investors
FY Fiscal Year
GDP Gross Domestic Product
GNS Gross National Savings
HFCs Housing Finance Companies
ICC Investment And Credit Company
IPOs Initial Public Offerings
IMPS Immediate Payment Service
IT Information Technology
JGLs Joint Liability Groups
M&A Merger And Acquisition
MOU Memorandum Of Understanding
MSMEs Micro, Small and Medium Enterprises
MUDRA Micro Units Development and Refinance Agency
NBFIs Non-Banking Financial Institution
NBFC Non-Banking Finance Companies
NBFC-BL Base Layer
NBFCs-D Deposit Taking/ Holding Non-Banking Finance Companies.
NBFCs-ND Non-Deposit Taking/ Holding Non-Banking Financial Company
NBFC-MFIs Non-Banking Financial Companies - Microfinance Institutions

|6|
Term Description
NBFCs-ND-SI Systemically Important Non-Deposit Taking/ Holding Non-Banking Financial
Company
NBFCs-ND-ICC Non-Banking Finance Companies- Investment and Credit Companies
NBFC-ML Middle Layer
NBFC-UL Upper Layer
NBFC-TL Top Layer
NIPL NPCI International Payments
NPCI National Payments Corporation of India
NNPA Net Non-Performing Assets
NSE National Stock Exchange
PDs Primary Dealers
PCA Prompt Corrective Action
QFIs Qualified Foreign Investors
QR code Quick-Response Code
RBI Reserve Bank of India
SBR Scale-Based Regulation
SCBs SCB Securities Co., Ltd.
SEBI Securities And Exchange Board of India
SIP Systematic Investment Plans
UHNWI Ultra High Net Worth Individuals
UPI Unified Payments Interface
US/USA The United States of America
US$ United States Dollar or US Dollar
WFE World Federation of Exchanges
YoY Year on Year

Conventional and General Terms/Abbreviations

Term Description
₹ / Rs. / Rupees / INR Indian Rupees
A/c Account
AGM Annual General Meeting
AIF(s) Alternative Investment Funds, as defined and registered with SEBI under the
Securities and Exchange Board of India (Alternative Investment Funds)
Regulations, 2012
API Application Programming Interface
AS Accounting Standards issued by the Institute of Chartered Accountants of India
AY Assessment Year
BSE BSE Limited
CAGR Compound Annual Growth Rate
CBDT Central Board of Direct Taxes, Government of India
Category I AIF AIFs who are registered as "Category I Alternative Investment Funds" under the
SEBI AIF Regulations
Category I FPIs FPIs who are registered as "Category I Foreign Portfolio Investors" under the
SEBI FPI Regulations
Category II AIF AIFs who are registered as "Category II Alternative Investment Funds" under the
SEBI AIF Regulations
CDSL Central Depository Services (India) Limited
CFO Chief Financial Officer
Central Government Central Government of India
CIN Corporate Identity Number
CIT Commissioner of Income Tax
CLRA Contract Labour (Regulation and Abolition) Act, 1970
Civil Code Code of Civil Procedure 1908
Client ID The client identification number maintained with one of the Depositories in relation

|7|
Term Description
to the demat account
Companies Act, 1956 Erstwhile Companies Act, 1956 along with the rules made thereunder (without
reference to the provisions thereof that have ceased to have effect upon the
notification of the Notified Sections)
Companies Act, 2013 / Companies Act, 2013 along with the rules made thereunder
Companies Act
CSE The Calcutta Stock Exchange Limited
CrPC Code of Criminal Procedure, 1973
Depositories Act Depositories Act, 1996
Depository(ies) A depository registered with SEBI under the Securities and Exchange Board of
India (Depositories and Participant) Regulations, 1996
Depository Participant / DP A depository participant as defined under the Depositories Act
DIN Director Identification Number
DP ID Depository Participant’s Identification
DTAA Double Taxation Avoidance Agreement
DPIIT Department for Promotion of Industry and Internal Trade, Ministry of Commerce
and Industry (formerly Department of Industrial Policy and Promotion),
Government of India
EBIT Earnings before interest and taxes
EBITDA Earnings before interest, tax, depreciation and amortization
ECS Electronic Clearance Service
EGM Extraordinary General Meeting
EMI Equated Monthly Instalments
EPF Act Employees’ Provident Fund and Miscellaneous Provisions Act, 1952
EPS Earnings Per Share
FCNR Account Foreign Currency Non-Resident (Bank) account opened in accordance with the
FEMA
FDI Foreign Direct Investment
FDI Circular 2020 Consolidated FDI Policy dated October 15, 2020, issued by the Department for
Promotion of Industry and Internal Trade, Ministry of Commerce and Industry,
Government of India
FEMA Foreign Exchange Management Act, 1999, read with rules and regulations
thereunder
FEMA Rules Foreign Exchange Management (Non-debt Instruments) Rules, 2019
Financial Year / Fiscal Year Period of 12 months commencing on April 1 of the immediately preceding calendar
/ Fiscal year and ending on March 31 of that particular calendar year, unless otherwise stated
FIR First Information Report
FOIR Fixed Obligations to Income Ratio
FPIs A foreign portfolio investor who has been registered pursuant to the SEBI FPI
Regulations, provided that any FII who holds a valid certificate of registration shall
be deemed to be an FPI until the expiry of the block of three years for which fees
have been paid as per the Securities and Exchange Board of India (Foreign
Institutional Investors) Regulations, 1995
Fugitive Economic An individual who is declared a fugitive economic offender under Section 12 of the
Offender Fugitive Economic Offenders Act, 2018
FVCI Foreign Venture Capital Investors (as defined under the Securities and Exchange
Board of India (Foreign Venture Capital Investors) Regulations, 2000) registered
with SEBI
FVCI Regulations Securities and Exchange Board of India (Foreign Venture Capital Investors)
Regulations, 2000
GAAP Generally Accepted Accounting Principles
GDP Gross Domestic Product
GoI / Government The Government of India
GST Goods and Services Tax
HUF Hindu Undivided Family
IBC / Insolvency Code Insolvency and Bankruptcy Code, 2016, as amended

|8|
Term Description
ICAI Institute of Chartered Accountants of India
ICSI Institute of Company Secretaries of India
IEPF Investor Education and Protection Fund
IEPF Authority Investor Education and Protection Fund Authority established by the GOI under
Section 125 of the Companies Act, 2013
IFRS International Financial Reporting Standards
IFSC Indian Financial System Code
Income Tax Act / IT Act Income-tax Act, 1961
Ind AS The Indian Accounting Standards as specified under section 133 of the Companies
Act 2013 read with Companies (Indian Accounting Standards) Rules 2015, as
amended
India Republic of India
Indian GAAP Generally Accepted Accounting Principles of India
Insider Trading Regulations Securities and Exchange Board of India (Prohibition of Insider Trading)
Regulations, 2015, as amended
ISIN International Securities Identification Number
IBC Insolvency and Bankruptcy Code, 2016, as amended
IT Information Technology
ITAT Income Tax Appellate Tribunal
Ltd. Limited
LTV Loan-To-Value Ratio
MCA Ministry of Corporate Affairs
MIS Management Information System
Mn / mn Million
MSME Micro Small and Medium Enterprises
Mutual Fund Mutual funds registered with SEBI under the Securities and Exchange Board of
(Mutual Funds) Regulations, 1996
N.A. or NA Not Applicable
NACH National Automated Clearing House
NAV Net Asset Value
Net Asset Value per Equity Net Worth / Number of Equity shares subscribed and fully paid outstanding as of
Share / NAV per Equity March 31 of that Financial Year
Share
Net Worth Net worth means the aggregate value of the paid-up share capital and all reserves
created out of the profits and securities premium account and debit or credit balance
of profit and loss account, after deducting the aggregate value of the accumulated
losses, deferred expenditure and miscellaneous expenditure not written off, as per
the audited balance sheet, but does not include reserves created out of revaluation
of assets, write-back of depreciation and amalgamation
NBFC Non-Banking Financial Companies
Notified Sections The sections of the Companies Act, 2013 that have been notified by the MCA and
are currently in effect
NPA Non-Performing Assets
NRE Account Non-resident External Account
NRI A person resident outside India, who is a citizen of India and shall have the same
meaning as ascribed to such term in the Foreign Exchange Management (Deposit)
Regulations, 2016
NRO Non-Resident Ordinary
NRO Account Non-Resident Ordinary Account
NSDL National Securities Depository Limited
NSE National Stock Exchange of India Limited
OCB / Overseas Corporate A company, partnership, society or other corporate body owned directly or
Body indirectly to the extent of at least 60% by NRIs including overseas trusts, in which
not less than 60% of beneficial interest is irrevocably held by NRIs directly or
indirectly and which was in existence on October 3, 2003, and immediately before
such date had taken benefits under the general permission granted to OCBs under

|9|
Term Description
FEMA. OCBs are not allowed to invest in the Issue.
p.a. Per annum
P/E Ration Price / Earnings Ratio
PAN Permanent Account Number
PAT Profit after tax
Payment of Bonus Act Payment of Bonus Act, 1965
Payment of Gratuity Act Payment of Gratuity Act, 1972
Pvt. Ltd. Private Limited
RBI The Reserve Bank of India
RBI Act Reserve Bank of India Act, 1934, as amended
RCU Risk Control Unit
Regulation S Regulation S under the United States Securities Act of 1933, as amended
RoC Registrar of Companies, Mumbai
RTGS Real Time Gross Settlement
Rule 144A Rule 144A under the U.S. Securities Act
SARFAESI Securitization and Reconstruction of Financial Assets and Enforcement of
Security Interest Act, 2002
SCRA Securities Contracts (Regulation) Act, 1956, as amended
SCRR Securities Contracts (Regulation) Rules, 1957, as amended
SEBI The Securities and Exchange Board of India constituted under the SEBI Act
SEBI Act Securities and Exchange Board of India Act, 1992
SEBI AIF Regulations Securities and Exchange Board of India (Alternative Investment Funds)
Regulations, 2012, as amended
SEBI FPI Regulations Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations,
2019, as amended
SEBI ICDR Regulations Securities and Exchange Board of India (Issue of Capital and Disclosure
Requirements) Regulations, 2018, as amended
SEBI Listing Regulations / Securities and Exchange Board of India (Listing Obligations and Disclosure
SEBI LODR Regulations Requirements) Regulations, 2015, as amended
SEBI Takeover Regulations Securities and Exchange Board of India (Substantial Acquisition of Shares and
/ Takeover Regulations Takeovers) Regulations, 2011, as amended
Securities Act The United States Securities Act of 1993
SMS Short Message Service
STT Securities Transaction Tax
State Government The Government of a State in India
Supreme Court Supreme Court of India
Total Borrowings Aggregate of debt securities, borrowings (other than debt securities) and
subordinated liabilities
U.S.$ / USD / U.S. Dollar / United States Dollar, the legal currency of the United States of America
US$ / US Dollar / $
USA / U.S. / US / United United States of America
States
U.S. SEC U.S. Securities and Exchange Commission
U.S. GAAP Generally Accepted Accounting Principles in the United States of America
VCFs Venture capital funds as defined and registered with SEBI under the Securities and
Exchange Board of India (Venture Capital Fund) Regulations, 1996 or the SEBI
AIF Regulations, as the case may be
w.e.f. With effect from
Year / Calendar Year Unless context otherwise requires, shall refer to the twelve-months period ending
December 31 of a particular year

| 10 |
 NOTICE TO INVESTORS

The distribution of this Letter of Offer, the Abridged Letter of Offer, Application Form and Rights Entitlement
Letter and the issue of Rights Entitlement and Rights Equity Shares to persons in certain jurisdictions outside
India may be restricted by legal requirements prevailing in those jurisdictions. Persons into whose possession this
Letter of Offer, the Abridged Letter of Offer or Application Form may come are required to inform themselves
about and observe such restrictions.

Our Company is making this Issue on a rights basis to the Eligible Equity Shareholders and will dispatch the
Letter of Offer/ Abridged Letter of Offer, Application Form and Rights Entitlement Letter through email and
courier only to Eligible Equity Shareholders who have a registered address in India or who have provided an
Indian address to our Company. This Letter of Offer will be provided, through email and courier, by the Registrar,
on behalf of our Company, to the Eligible Equity Shareholders who have provided their Indian addresses to our
Company or who are located in jurisdictions where the offer and sale of the Rights Equity Shares is permitted
under laws of such jurisdictions and in each case who make a request in this regard.

Investors can also access this Letter of Offer, the Abridged Letter of Offer and the Application Form from the
websites of the Registrar, our Company and the Stock Exchanges. Our Company, the Lead Manager, and the
Registrar will not be liable for non-dispatch of physical copies of Issue Materials, in the event the Issue Materials
have been sent on the registered email addresses of such Eligible Equity Shareholder(s).

No action has been or will be taken to permit the Issue in any jurisdiction where action would be required for that
purpose, except that this Letter of Offer is being filed with the Stock Exchanges for observations. Accordingly,
the Rights Entitlements or Rights Equity Shares may not be offered or sold, directly or indirectly, and this Letter
of Offer, the Abridged Letter of Offer or any offering materials or advertisements in connection with the Issue
may not be distributed, in whole or in part, in any jurisdiction (other than in India), except in accordance with
legal requirements applicable in such jurisdiction. Receipt of this Letter of Offer or the Abridged Letter of Offer
(including by way of electronic means) will not constitute an offer in those jurisdictions in which it would be
illegal to make such an offer and, in those circumstances, this Letter of Offer, and the Abridged Letter of Offer
must be treated as sent for information purposes only and should not be acted upon for subscription to the Rights
Equity Shares and should not be copied or redistributed. Accordingly, persons receiving a copy of this Letter of
Offer or the Abridged Letter of Offer or Application Form should not, in connection with the issue of the Rights
Equity Shares or the Rights Entitlements, distribute or send this Letter of Offer or the Abridged Letter of Offer to
any person outside India where to do so, would or might contravene local securities laws or regulations. If this
Letter of Offer, the Abridged Letter of Offer or Application Form is received by any person in any such
jurisdiction, or by their agent or nominee, they must not seek to subscribe to the Rights Equity Shares or the Rights
Entitlements referred to in this Letter of Offer, the Abridged Letter of Offer or the Application Form.

Any person who makes an application to acquire the Rights Entitlements or the Rights Equity Shares offered in
the Issue will be deemed to have declared, represented, warranted and agreed that such person is authorised to
acquire the Rights Entitlements or the Rights Equity Shares in compliance with all applicable laws and regulations
prevailing in his jurisdiction. Our Company, the Registrar, or any other person acting on behalf of our Company
reserves the right to treat any Application Form as invalid where they believe that Application Form is incomplete,
or acceptance of such Application Form may infringe applicable legal or regulatory requirements and we shall not
be bound to allot or issue any Rights Equity Shares or Rights Entitlement in respect of any such Application Form.

Neither the receipt of this Letter of Offer nor any sale of Rights Equity Shares hereunder, shall, under any
circumstances, create any implication that there has been no change in our Company’s affairs from the date hereof
or the date of such information or that the information contained herein is correct as at any time subsequent to the
date of this Letter of Offer or the date of such information.

The contents of this Letter of Offer should not be construed as legal, tax, business, financial or investment advice.
Prospective investors may be subject to adverse foreign, state or local tax or legal consequences as a result of the
offer of Rights Equity Shares or Rights Entitlements. As a result, each investor should consult its own counsel,
business advisor and tax advisor as to the legal, business, tax and related matters concerning the offer of the Rights
Equity Shares or Rights Entitlements. In addition, neither our Company nor the Lead Manager or its affiliates are
making any representation to an offeree or purchaser of the Rights Equity Shares regarding the legality of an
investment in the Rights Entitlements or the Rights Equity Shares by such offeree or purchaser under any

| 11 |
applicable laws or regulations. Investors are advised to make their independent investigations and ensure that the
number of Rights Equity Shares applied for do not exceed the prescribed limits under applicable laws or
regulations.

The Rights Entitlements and the Rights Equity Shares have not been approved or disapproved by any regulatory
authority, nor has any regulatory authority passed upon or endorsed the merits of the offering of the Rights
Entitlements, the Rights Equity Shares or the accuracy or adequacy of this Letter of Offer. Any representation to
the contrary is a criminal offence in certain jurisdictions.

The Issue Materials are supplied to you solely for the use of the person who receive it from our Company or from
the Registrar and may not be reproduced, redistributed or passed on, directly or indirectly, to any other person or
published, in whole or in part, for any purpose.

THE CONTENTS OF THIS LETTER OF OFFER SHOULD NOT BE CONSTRUED AS LEGAL, TAX
OR INVESTMENT ADVICE. PROSPECTIVE INVESTORS MAY BE SUBJECT TO ADVERSE
FOREIGN, STATE OR LOCAL TAX OR LEGAL CONSEQUENCES AS A RESULT OF THE ISSUE
OF RIGHTS EQUITY SHARES OR RIGHTS ENTITLEMENTS. ACCORDINGLY, EACH INVESTOR
SHOULD CONSULT THEIR OWN COUNSEL, BUSINESS ADVISOR AND TAX ADVISOR AS TO
THE LEGAL, BUSINESS, TAX AND RELATED MATTERS CONCERNING THE ISSUE OF RIGHTS
EQUITY SHARES. IN ADDITION, OUR COMPANY IS NOT MAKING ANY REPRESENTATION TO
ANY OFFEREE OR PURCHASER OF THE EQUITY SHARES REGARDING THE LEGALITY OF AN
INVESTMENT IN THE EQUITY SHARES BY SUCH OFFEREE OR PURCHASER UNDER ANY
APPLICABLE LAWS OR REGULATIONS.

NO OFFER IN THE UNITED STATES

The Rights Entitlements and the Rights Equity Shares have not been and will not be registered under the Securities
Act or the securities laws of any state of the United States and may not be offered or sold in the United States of
America or the territories or possessions thereof ("United States"), except in a transaction not subject to, or
exempt from, the registration requirements of the Securities Act and applicable state securities laws. The offering
to which this Letter of Offer relates is not, and under no circumstances is to be construed as, an offering of any
Rights Equity Shares or Rights Entitlement for sale in the United States or as a solicitation therein of an offer to
buy any of the Rights Equity Shares or Rights Entitlement. There is no intention to register any portion of the
Issue or any of the securities described herein in the United States or to conduct a public offering of securities in
the United States.

Neither our Company nor any person acting on our behalf will accept a subscription or renunciation from any
person, or the agent of any person, who appears to be, or who our Company or any person acting on our behalf
has reason to believe is in the United States when the buy order is made. Envelopes containing an Application
Form and Rights Entitlement Letter should not be postmarked in the United States or otherwise dispatched from
the United States or any other jurisdiction where it would be illegal to make an offer, and all persons subscribing
for the Rights Equity Shares and wishing to hold such Equity Shares in registered form must provide an address
for registration of these Equity Shares in India. Our Company is making the Issue on a rights basis to Eligible
Equity Shareholders and this Letter of Offer/ Abridged Letter of Offer and Application Form and Rights
Entitlement Letter will be dispatched only to Eligible Equity Shareholders who have an address in India. Any
person who acquires Rights Entitlements and the Rights Equity Shares will be deemed to have declared,
represented, warranted and agreed that, (i) it is not, and that at the time of subscribing for such Rights Equity
Shares or the Rights Entitlements, it will not be, in the United States, and (ii) it is authorized to acquire the Rights
Entitlements and the Rights Equity Shares in compliance with all applicable laws and regulations.

Our Company reserves the right to treat any Application Form as invalid which: (i) does not include the
certification set out in the Application Form to the effect that the subscriber is authorised to acquire the Rights
Equity Shares or Rights Entitlement in compliance with all applicable laws and regulations; (ii) appears to us or
our agents to have been executed in or dispatched from the United States; (iii) where a registered Indian address
is not provided; or (iv) where our Company believes that the Application Form is incomplete or acceptance of
such Application Form may infringe applicable legal or regulatory requirements; and our Company shall not be
bound to allot or issue any Rights Equity Shares or Rights Entitlement in respect of any such Application Form.

| 12 |
The Rights Entitlements may not be transferred or sold to any person in the United States.

The Rights Entitlements and the Equity Shares have not been approved or disapproved by the US Securities and
Exchange Commission (the "US SEC"), any state securities commission in the United States or any other US
regulatory authority, nor have any of the foregoing authorities passed upon or endorsed the merits of the offering
of the Rights Entitlements, the Equity Shares or the accuracy or adequacy of this Letter of Offer.

Any representation to the contrary is a criminal offence in the United States.

The above information is given for the benefit of the Applicants/ Investors. Our Company is not liable for any
amendments or modification or changes in applicable laws or regulations, which may occur after the date of this
Letter of Offer. Investors are advised to make their independent investigations and ensure that the number of
Rights Equity Shares applied for do not exceed the applicable limits under the applicable laws or regulations.

THIS DOCUMENT IS SOLELY FOR THE USE OF THE PERSON WHO RECEIVED IT FROM OUR
COMPANY OR FROM THE REGISTRAR. THIS DOCUMENT IS NOT TO BE REPRODUCED OR
DISTRIBUTED TO ANY OTHER PERSON.

| 13 |
 PRESENTATION OF FINANCIAL AND OTHER INFORMATION

Certain Conventions

All references to "India" contained in this Letter of Offer are to the Republic of India and its territories and
possessions and all references herein to the "Government", "Indian Government", "GoI", Central Government" or
the "State Government" are to the Government of India, central or state, as applicable.

Unless otherwise specified or the context otherwise requires, all references in this Letter of Offer to the 'US' or
'U.S.' or the 'United States' are to the United States of America and its territories and possessions. Unless otherwise
specified, any time mentioned in this Letter of Offer is in Indian Standard Time ("IST"). Unless indicated
otherwise, all references to a year in this Letter of Offer are to a calendar year.

A reference to the singular also refers to the plural and one gender also refers to any other gender, wherever
applicable.

Unless stated otherwise, all references to page numbers in this Letter of Offer are to the page numbers of this
Letter of Offer.

Financial Data

Unless stated otherwise or the context otherwise requires, the financial information and financial ratios in this
Letter of Offer have been derived from our Restated Financial Statements. For details, please see "Financial
Information" on page 102 of this Letter of Offer. Our Company’s financial year commences on April 01 and ends
on March 31 of next year. Accordingly, all references to a particular financial year, unless stated otherwise, are to
the twelve (12) month period ended on March 31 of that year.

The Government of India has adopted the Indian Accounting Standards ("Ind AS"), which are converged with
the International Financial Reporting Standards of the International Accounting Standards Board ("IFRS") and
notified under Section 133 of the Companies Act read with the Companies (Indian Accounting Standards) Rules,
2015, as amended (the "Ind AS Rules").

Unless stated or the context requires otherwise, our financial data as at and for the Financial Year ended March
31, 2024, March 31, 2023, and March 31, 2022 and three months period ended June 30, 2024, included in this
Letter of Offer is derived from the Restated Financial Statements for the Financial Year ended March 31, 2024,
March 31, 2023 and March 31, 2022 and Limited Reviewed Financial Statement Information for the quarter ended
June 30, 2024, respectively.

The Restated Financial Statements of our Company for the Financial Year ended March 31, 2024, March 31, 2023
and March 31, 2022 have been prepared in accordance with Ind AS, as prescribed under Section 133 of Companies
Act read with the Ind AS Rules and other the relevant provisions of the Companies Act and in accordance with
the SEBI ICDR Regulations and the Guidance Note on Reports in Company Prospectuses (Revised), 2019, issued
by the ICAI. Our Company publishes its financial statements in Rupees in Lakhs.

In this Letter of Offer, any discrepancies in any table between the total and the sums of the amounts listed are due
to rounding off and unless otherwise specified all financial numbers in parenthesis represent negative figures. Our
Company has presented all numerical information in the Financial Statements in whole numbers and in this Letter
of Offer in "lakh" units or in whole numbers where the numbers have been too small to represent in lakh. One
lakh represents 100,000 and one million represents 1,000,000.

There are significant differences between Ind AS, US GAAP and IFRS. We have not provided a reconciliation of
the financial information to IFRS or US GAAP. Our Company has not attempted to also explain those differences
or quantify their impact on the financial data included in this Letter of Offer, and you are urged to consult your
own advisors regarding such differences and their impact on our financial data. Accordingly, the degree to which
the financial information included in this Letter of Offer will provide meaningful information is entirely dependent
on the reader’s level of familiarity with Indian accounting policies and practices, Ind AS, the Companies Act and
the SEBI ICDR Regulations. For further information, see "Financial Information" on page 102 of this Letter of
Offer.

| 14 |
Certain figures contained in this Letter of Offer, including financial information, have been subject to rounded off
adjustments. All figures in decimals (including percentages) have been rounded off to one or two decimals.
However, where any figures that may have been sourced from third-party industry sources are rounded off to other
than two decimal points in their respective sources, such figures appear in this Letter of Offer rounded-off to such
number of decimal points as provided in such respective sources. In this Letter of Offer, (i) the sum or percentage
change of certain numbers may not conform exactly to the total figure given; and (ii) the sum of the numbers in a
column or row in certain tables may not conform exactly to the total figure given for that column or row. Any
such discrepancies are due to rounding off.

Currency and Units of Presentation

All references to:

• "Rupees" or "₹" or "INR" or "Rs." are to Indian Rupee, the official currency of the Republic of India;
and

• "USD" or "US$" or "$" are to United States Dollar, the official currency of the United States of America.

Our Company has presented certain numerical information in this Letter of Offer in "lakh" or "Lac" units or in
whole numbers. One lakh represents 100,000 and one million represents 1,000,000. All the numbers in the
document have been presented in lakh or in whole numbers where the numbers have been too small to present in
lakh. Any percentage amounts, as set forth in "Risk Factors", "Our Business", "Management’s Discussion and
Analysis of Financial Conditions and Results of Operation" on pages 22, 76 and 154 and elsewhere in this Letter
of Offer, unless otherwise indicated, have been calculated based on our Financial Information.

Exchange Rates

This Letter of Offer contains conversions of certain other currency amounts into Indian Rupees that have been
presented solely to comply with the SEBI ICDR Regulations. These conversions should not be construed as a
representation that these currency amounts could have been, or can be converted into Indian Rupees, at any
particular rate or at all.

The following table sets forth, for the periods indicated, information with respect to the exchange rate between
the Indian Rupee and other foreign currencies:
(in ₹)
Name of the As of March 31, 2024 As of March 31, 2023 As of March 31, 2022
Currency
United States Dollar 83.37 82.22 75.81
(Source: RBI reference rate)
Note: In case if March 31 of any of the respective years is a public holiday, the previous Working Day not being a public holiday has been
considered. Since, March 31, March 30, and March 29, 2024, were public holidays, the exchange rate as of March 28, 2024, has been
considered.

Industry and Market Data

Unless stated otherwise, industry and market data used in this Letter of Offer has been obtained or derived from
publicly available information as well as industry publications and sources.

Industry publications generally state that the information contained in such publications has been obtained from
publicly available documents from various sources believed to be reliable, but their accuracy and completeness
are not guaranteed, and their reliability cannot be assured. Although we believe the industry and market data used
in this Letter of Offer is reliable, it has not been independently verified by us. The data used in these sources may
have been reclassified by us for the purposes of presentation. Data from these sources may also not be comparable.
Such data involves risks, uncertainties and numerous assumptions and is subject to change based on various
factors, including those discussed in "Risk Factors" on page 22 of this Letter of Offer. Accordingly, investment
decisions should not be based solely on such information.

| 15 |
The extent to which the market and industry data used in this Letter of Offer is meaningful depends on the
reader’s familiarity with and understanding of the methodologies used in compiling such data. There are
no standard data gathering methodologies in the industry in which the business of our Company is
conducted, and methodologies and assumptions may vary widely among different industry sources.

| 16 |
 FORWARD LOOKING STATEMENTS

In this Letter of Offer, we have included statements, which contain words or phrases such as "will", "may", "aim",
"is likely to result", "believe", "expect", "continue", "anticipate", "estimate", "intend", "plan", "contemplate",
"seek to", "future", "objective", "goal", "project", "should", "pursue" and similar expressions or variations of such
expressions, that are "forward looking statements".

All statements regarding our Company's expected financial conditions, results of operations, business plans and
prospects are forward looking statements. These forward-looking statements include statements as to our
Company's business strategy, planned projects, revenue and profitability (including, without limitation, any
financial or operating projections or forecasts), new business and other matters discussed in this Letter of Offer
that are not historical facts. These forward-looking statements contained in this Letter of Offer (whether made by
our Company or any third party), are predictions and involve known and unknown risks, uncertainties,
assumptions and other factors that may cause the actual results, performance or achievements of our Company to
be materially different from any future results, performance or achievements expressed or implied by such forward
looking statements or other projections.

Actual results may differ materially from those suggested by the forward looking statements due to risks or
uncertainties associated with our expectations with respect to, but not limited to, regulatory changes pertaining to
the industry in which we operate and our ability to respond to them, our ability to successfully implement our
strategy, our growth and expansion, the competition in our industry and markets, technological changes, our
exposure to market risks, general economic and political conditions in India and globally, which have an impact
on our business activities or investments, the monetary and fiscal policies of India, inflation, deflation,
unanticipated turbulence in interest rates, foreign exchange rates, equity prices or other rates or prices,
performance of the financial markets in India and globally, changes in laws, regulations and taxes, incidence of
natural calamities and/or acts of violence. Important factors that could cause actual results to differ materially
from our Company's expectations include, but are not limited to, the following:

1. We, as an NBFC, have to adhere to several regulatory norms prescribed by RBI from time to time. Any
non-compliance with such norms or any adverse change in the norms could negatively affect our
Company’s operations, business, financial condition and the trading price of Equity Shares.
2. Any disruption in our sources of funding or an increase in costs of funding could adversely affect our
liquidity and financial condition.
3. We are affected by volatility in interest rates for both our lending and fund raisings operations, which
could cause our net interest income to decline and adversely affect the results of operations and
profitability.
4. There are certain legal proceedings involving our Company, Directors and Promoter, an adverse outcome
in which may have an adverse impact on our reputation, business, financial condition, results of
operations and cash flows.
5. Our success depends largely on our senior management and our ability to attract and retain our key
personnel. Any significant changes in the key managerial personnel may affect the performance of our
Company.
6. Our ability to pay dividends in the future will depend upon our future earnings, financial condition, cash
flows, working capital requirements, capital expenditure and restrictive covenants in our financing
arrangements.
7. Certain sections of this Letter of Offer disclose information about our industry in connection with the
Issue, which is sourced from publicly available information and any reliance on such information for
making an investment decision in the Issue is subject to inherent risk.
8. We are required to obtain and maintain certain governmental and regulatory licenses and permits and the
failure to obtain and maintain such licenses and permits in a timely manner, or at all, may adversely
affect our business and operations.
9. Our Company is subject to periodic inspections by the RBI. Non-compliance with observations made
during any such inspections could result in penalties and fines on our Company and could adversely
affect the business of our Company.
10. Any regulatory actions and penalties for any past or future non-compliance may adversely affect our
business or reputation, or both.

| 17 |
For further discussion of factors that could cause the actual results to differ from our estimates and expectations,
please refer to "Risk Factors", "Our Business" and "Management's Discussion and Analysis of Financial
Position and Results of Operations" on pages 22, 76, and 154 respectively of this Letter of Offer. By their nature,
certain market risk disclosures are only estimates and could be materially different from what actually occurs in
the future. As a result, actual gains or losses could materially differ from those that have been estimated.

We cannot assure investors that the expectations reflected in these forward-looking statements will prove to be
correct. Given these uncertainties, investors are cautioned not to place undue reliance on such forward-looking
statements and not to regard such statements as a guarantee of future performance.

Forward looking statements reflect the current views of our Company as of the date of this Letter of Offer and are
not a guarantee of future performance. These statements are based on the management's beliefs and assumptions,
which in turn are based on currently available information. Although we believe the assumptions upon which
these forward-looking statements are based are reasonable, any of these assumptions could prove to be inaccurate,
and the forward-looking statements based on these assumptions could be incorrect. Neither our Company, our
Directors, our Promoters, nor any of their respective affiliates or advisors have any obligation to update or
otherwise revise any statements reflecting circumstances arising after the date hereof or to reflect the occurrence
of underlying events, even if the underlying assumptions do not come to fruition.

In accordance with the SEBI ICDR Regulations, our Company will ensure that investors are informed of material
developments from the date of this Letter of Offer until the time of receipt of the listing and trading permissions
from the Stock Exchange.

| 18 |
 SUMMARY OF LETTER OF OFFER

The following is a general summary of certain disclosures included in this Letter of Offer and is not exhaustive,
nor does it purport to contain a summary of all the disclosures in this Letter of Offer or all details relevant to the
prospective investors. This summary should be read in conjunction with, and is qualified in its entirety by, the
more detailed information appearing elsewhere in this Letter of Offer, including, "Risk Factors", "Objects of the
Issue", "Our Business" and "Outstanding Litigation and Defaults" on pages 22, 47, 76 and 170, respectively
of this Letter of Offer.

1. Primary Business of our Company

Our Company is a non-deposit taking Non-Banking Financial Company (NBFC-Non-Systematically

Important Non-Deposit Taking Company categorized as Investment and Credit Company i.e. ICC)
registered with the RBI primarily engaged in retail MSME secured lending in Tier II, III and IV cities
of India.

For further information, please refer to "Our Business" on page 76 of this Letter of Offer.

2. Our Promoters

The Promoters of our Company are (i) Amitabh Chaturvedi; (ii) Minal Chaturvedi; (iii) Abhishek
Chaturvedi; (iv) Asher Foods Private Limited; and (v) Saguna Mercantile Private Limited.

3. Subscription to the Issue by our Promoters and Promoter Group

Our Promoters and entities forming part of our Promoter Group vide their letters dated August 01, 2024,
have indicated that they may or may not intend to subscribe, jointly and/ or severally to the full extent
of their Rights Entitlement and may renounce to the full/part extent of any of their Rights Entitlement.
The extent of renouncement, if any, shall be finalized before the filing of the Letter of Offer with Stock
Exchanges.

4. Objects of the Issue

The Net Proceeds are proposed to be used in the manner set out in the following table:
(₹ in Lakhs)
Particulars Amount
Gross Proceeds from the Issue# 4,481.99
Less: Issue related expenses 308.00
Net Proceeds of the Issue 4,173.99
#
assuming full subscription and subject to the finalisation of Basis of allotment
#
The amount utilised for general corporate purposes shall not exceed 25% of the Gross Proceeds of the Issue.

For further details, please see chapter titled "Objects of the Issue" on page 47 of this Letter of Offer.

5. Summary of Financial Information

Following are the details as per the Restated Financial Statement as at and for the Financial Years
ended on March 31, 2024; March 31, 2023; and March 31, 2022:

(₹ in lakhs)
Sr. No. Particulars March 31, 2024 March 31, 2023 March 31, 2022
1. Authorised Share
Capital
Equity Share Capital 5060.00 3560.00 2060.00
Preference Share 0.00 0.00 0.00
Capital
2. Paid-up Capital 3361.50 2302.20 2053.86

| 19 |
 Sr. No. Particulars March 31, 2024 March 31, 2023 March 31, 2022
3. Net Worth attributable 4832.96 1729.65 1602.14
to Equity Shareholders
4. Total Revenue 444.22 256.08 (311.37)
5. Profit/(Loss) after tax (761.27) (632.78) (736.74)
6. Earnings per Share (2.27) (2.31) (14.06)
Basic Earnings Per
Share diluted (in ₹)
7. Net Asset Value per 14.38 7.51 7.80
Equity Share (in ₹) on
Basic weighted No. of
Shares
8. Total Borrowings 2212.82 29.64 39.62

For further details, please refer the section titled "Financial Information" on page 102 of this Letter
of Offer.

6. Outstanding Litigations

A summary of outstanding litigation proceedings involving our Company as on the date of this Letter
of Offer is provided below:
(₹ in Lakhs)^
Nature of Cases No. of outstanding cases Amount Involved
Litigation involving our Company
Criminal proceedings by our Company Nil Nil
Criminal proceedings against our Company Nil Nil
Material civil litigation against our Company Nil Nil
Material civil litigation by our Company Nil Nil
Actions by statutory or regulatory Authorities 1 29.15
Direct and indirect tax proceedings 8 0.19
^
To the extent quantifiable

For details, please refer to chapter titled "Outstanding Litigations and Material Developments" on
page 170 of this Letter of Offer.

7. Risk Factors

For details of potential risks associated with our ongoing business activities and industry, investment in
Equity Shares of the Company, material litigations which impact the business of the Company and other
economic factors please refer to "Risk Factors" on page 22 of this Letter of Offer.

8. Contingent Liabilities

Please refer to the chapters titled "Financial Information" on page 102 of the Financial Information
section in this Letter of Offer.

9. Related Party Transactions

Please refer to "Financial Information" on page 102 of the Financial Information in this Letter of Offer.

10. Issue of equity shares made in last one year for consideration other than cash

Except as disclosed below, none of our Promoter or Promoter Group have acquired any securities in the
last one year, immediately preceding the date of filing of this Letter of Offer:

| 20 |
 Date of Number of Equity Face value Issue Price Nature of Nature of % of Pre-
allotment/ Shares allotted/ per Equity per Equity consideration allotment/ Issue
acquisition transferred Share (₹) Share (₹) transfer capital
17.03.2024 2219161 10 10 Issue of shares Fresh 6.60
pursuant to the allotment
approval of the
Scheme of
Merger by
Absorption of
Canopy Finance
Limited by
Purple Finance
Limited

11. Split or consolidation of Equity Shares in the last one-year

Our Company has not carried out any split or consolidation of Equity Shares in the last one year
immediately preceding the date of filing of this Letter of Offer.

| 21 |
 SECTION II – RISK FACTORS

An investment in equity shares involves a high degree of risk. You should carefully consider all the information
disclosed in this Letter of Offer, including the risks and uncertainties described below and the "Financial
Information" on page 102 of this Letter of Offer, before making an investment in the Equity Shares. The risks
described below are not the only risks relevant to us or Equity Shares or the industries in which we currently
operate. Additional risks and uncertainties, not presently known to us or that we currently deem immaterial may
also impair our business, cash flows, prospects, results of operations and financial condition. In order to obtain
a complete understanding about us, investors should read this section in conjunction with "Industry Overview",
"Our Business" and "Management’s Discussion and Analysis of Financial Condition and Results of
Operations" on pages, 55, 76 and 154 respectively, as well as the other financial information included in this
Letter of Offer. If any of the risks described below, or other risks that are not currently known or are currently
deemed immaterial actually occur, our business, cash flows, prospects, results of operations and financial
condition could be adversely affected, the trading price of the Equity Shares could decline, and investors may lose
all or part of the value of their investment. The financial and other related implications of the risk factors,
wherever quantifiable, have been disclosed in the risk factors mentioned below.

However, there are certain risk factors where the financial impact is not quantifiable and, therefore, cannot be
disclosed in such risk factors. You should consult your tax, financial and legal advisors about the particular
consequences to you of an investment in this Issue. The following factors have been considered for determining
the materiality: (1) some events may not be material individually but may be found material collectively; (2) some
events may have material impact qualitatively instead of quantitatively; and (3) some events may not be material
at present but may have material impact in future.

This Letter of Offer also contains forward-looking statements that involve risks and uncertainties. Our actual
results could differ materially from those anticipated in these forward-looking statements as a result of certain
factors, including the considerations described below and elsewhere in this Letter of Offer. Any potential investor
in, and purchaser of, the Equity Shares should pay particular attention to the fact that our Company is an Indian
company and is subject to a legal and regulatory environment which, in some respects, may be different from that
which prevails in other countries. For further information, please refer to "Forward Looking Statements" on
page 17 of this Letter of Offer.

Unless otherwise indicated or the context requires otherwise, the financial information included herein is based
on our Restated Financial Statements included in this Letter of Offer. For further information, please refer to
“Financial Information” on page 102 of this Letter of Offer. In this section, unless the context requires otherwise,
any reference to “we”, “us” or “our” refers to Purple Finance Limited.

INTERNAL RISK FACTORS

1. We, as an NBFC, have to adhere to several regulatory norms prescribed by RBI from time to time.
Any non-compliance with such norms or any adverse change in the norms could negatively affect our
Company’s operations, business, financial condition and the trading price of Equity Shares.

NBFCs in India are subject to strict regulation and supervision by the RBI. We require certain approvals,
licenses, registrations and permissions for operating our business. Such approvals, licenses, registrations
and permissions must be maintained / renewed over time and we may have to comply with certain
conditions in relation to these approvals. Moreover, the applicable requirements may change from time.
We are required to obtain and maintain a license for carrying on business as an NBFC. If we fail to obtain
or retain any of these approvals or licenses, or renewals thereof, in a timely manner, or at all, our business
may be adversely affected. RBI has the authority to change these norms/ criteria as and when required.
Inability to meet the prescribed norms/ criteria, can adversely affect the operations and profitability of
our Company.

2. Any disruption in our sources of funding or an increase in costs of funding could adversely affect our
liquidity and financial condition.

The liquidity and profitability of our business majorly depends on our timely access to, and the costs
associated with, raising funds. Our business thus depends and will continue to depend on our ability to

| 22 |
 access a variety of funding sources. Further, our ability to compete effectively will depend, in part, on
our ability to maintain or increase our margins. Our margins are affected in part by our ability to continue
to secure low-cost funding at rates lower than the interest rates at which we lend to our customers. Our
ability to raise funds on acceptable terms and at competitive rates depends on various factors including
our current and future results of operations and financial condition, global and local macroeconomic
conditions and the effect of events such as a pandemic, our risk management policies, the shareholding
of Promoter in our Company, our credit ratings, our brand equity, the regulatory environment and policy
initiatives in India and developments in the international markets affecting the Indian economy. If we are
unable to access funds at an effective cost that is comparable to or lower than that of our competitors,
our net interest margins, income, and market share may be adversely affected.

Certain regulatory developments including the restrictions imposed on NBFCs by the RBI through a
Master Circular – Bank Finance to Non- Banking Financial Companies dated July 1, 2015 (the “Master
Circular”) may restrict our ability to obtain bank financing for specific activities. Pursuant to the Master
Circular, the RBI has imposed certain restrictions on banks providing financing to NBFCs. Under this
Master Circular, certain activities by NBFCs are ineligible for financing by banks, including certain types
of discounting and rediscounting of bills, current and long term investments in shares, debentures, loans
and advances by NBFCs to their subsidiaries and group companies, lending by NBFCs to individuals for
subscribing to public offerings and purchasing shares from the secondary market, unsecured loans, inter-
corporate deposits provided by NBFCs, and subscription to shares or debentures by NBFCs. In addition,
the Master Circular prohibits:

• banks from granting bridge loans of any nature, provide interim finance against capital or
debenture issues or in the form of loans of a temporary nature pending the raising of long-term
funds from the market by way of capital, deposits, or other means to any category of NBFCs;

• banks from accepting shares and debentures as collateral for secured loans granted to NBFCs;
and

• banks from executing guarantees covering inter-Company deposits or loans that guarantee
refund of deposits or loans accepted by NBFCs. The Master Circular also requires that
guarantees not be issued by banks for the purpose of indirectly enabling the placement of
deposits with NBFCs.

Changes in economic, regulatory and financial conditions or any lack of liquidity in the market could
adversely affect our ability to access funds at competitive rates, or at all, which could adversely affect
our liquidity and financial condition.

3. We are affected by volatility in interest rates for both our lending and fund raisings operations, which
could cause our net interest income to decline and adversely affect the results of operations and
profitability.

Our net interest margins are affected by any volatility in interest rates in our lending operations. Interest
rates are highly sensitive to many factors beyond our control, including competition from other banks
and NBFCs, the monetary policies of the RBI, deregulation of the financial sector in India, domestic and
international economic and political conditions and other factors, which have historically generated a
relatively high degree of volatility in interest rates in India. Persistently high inflation in India may
discourage the Government from implementing policies that would cause interest rates to decrease.
Moreover, if there is an increase in the interest rates, we may be unable to pass it fully or partially to our
customers. Further, we may find it difficult to compete with our competitors, who may have access to
funds at a lower cost or lower cost deposits. To the extent our borrowings are linked to market interest
rates, we may have to pay interest at a higher rate than competitors that may borrow only at fixed interest
rates. Further, our ability to pass on any increase in interest rates to borrowers may also be constrained
by regulations implemented by the Government or the RBI. In a declining interest rate environment, if
our cost of funds does not decline simultaneously or to the same extent as the yield on our interest-
earning assets, it could lead to a reduction in our net interest income and net interest margin.

| 23 |
4. There are certain legal proceedings involving our Company, Directors and Promoter, an adverse
outcome in which may have an adverse impact on our reputation, business, financial condition, results
of operations and cash flows.

Our Company is involved in certain legal proceedings. These legal proceedings are pending at different
levels of adjudication before various courts and tribunals or other governmental authorities. The amounts
claimed in these proceedings have been disclosed to the extent ascertainable and include amounts
claimed jointly and severally from us and other parties. Should any new developments arise, such as any
change in applicable Indian law or any rulings against us by appellate courts or tribunals, we may need
to make provisions in our financial statements that could increase expenses and current liabilities. Any
adverse decision in such legal proceedings may have a material adverse effect on our business, financial
condition, results of operations and cash flows.

A summary of outstanding litigation proceedings involving our Company, our Promoters, our Directors
and our Group Company as on the date of this Letter of Offer and as disclosed in the section titled
“Outstanding Litigation and Other Material Developments” in terms of the requirements under the SEBI
ICDR Regulations is provided below:
(in Rs Lakhs)
Name of Entity Criminal Tax Proceeding Statutory or Material Civil Aggregate
Proceedings Regulatory Litigation amount
Proceedings involved
Company
Against our Nil 8 1 Nil 29.34
Company
By our Nil Nil Nil 1^ 29.15
Company
Directors
(Other than
Promoters)
Against our Nil 1 Nil Nil 1.16
Director
By our Director Nil Nil Nil Nil Nil
Promoters
Against our Nil 9 Nil Nil 163.39
Promoters
By our Nil Nil Nil Nil Nil
Promoters
^This proceeding is Canopy Finance Limited v. Union of India and ors., and the proceeding mentioned in the above table under
“Statutory or Regulatory Proceedings” against our company, pertains to the same litigation.

Further, except as disclosed in “Outstanding Litigation and Other Material Developments” on page
170. We do not have any subsidiaries, due to which the litigations with respect to our subsidiaries have
not been included.

If any of these outstanding litigations are decided against our Company, Promoters, Directors or Group
Companies, as the case may be, we may need to make provisions in our financial statements that could
increase our expenses and current liabilities. In this regard, we may be subject to penalties and regulatory
actions including the suspension of our business. There can be no assurance that these litigations will be
decided in favor of our Company or in the favor of our Promoter, Directors or Group Company, and such
proceedings may divert management time and attention and consume financial resources in their defence
or prosecution. An adverse outcome in any of these proceedings may affect our reputation, standing and
future business, and could have an adverse effect on our business, prospects, financial condition, results
of operations and cash flows.

| 24 |
5. Our success depends largely on our senior management and our ability to attract and retain our key
personnel. Any significant changes in the key managerial personnel may affect the performance of
our Company.

Our success depends on the continued services and performance of the members of the senior
management team and other key employees. Competition for senior and experienced personnel in the
industry is intense at present. The loss of the services of senior management or other key personnel could
seriously impair our ability to continue to manage and expand our business, which may adversely affect
our financial condition.

6. Our ability to pay dividends in the future will depend upon our future earnings, financial condition,
cash flows, working capital requirements, capital expenditure and restrictive covenants in our
financing arrangements.

Our Company may retain all our future earnings, if any, for use in the operations and expansion of our
business. As a result, we may not declare dividends in the foreseeable future. Any future determination
as to the declaration and payment of dividends will be at the discretion of our Board of Directors and
will depend on factors that our Board of Directors deem relevant, including among others, our results of
operations, financial condition, cash requirements, business prospects and any other financing
arrangements. Accordingly, realization of a gain on shareholders’ investments may largely depend upon
the appreciation of the price of our Equity Shares. There can be no assurance that our Equity Shares will
appreciate.

7. We are required to obtain and maintain certain governmental and regulatory licenses and permits and
the failure to obtain and maintain such licenses and permits in a timely manner, or at all, may
adversely affect our business and operations.

We are required to obtain and maintain certain approvals, licenses, registrations and permits in
connection with our business and operations. There can be no assurance that we will be able to obtain
and maintain such approvals, licenses, registrations and permits in the future. An inability to obtain or
maintain such registrations and licenses in a timely manner, or at all, and comply with the prescribed
conditions in connection therewith may adversely affect our ability to carry on our business and
operations, and consequently our results of operations and financial condition. Any failure by our
Company to renew, maintain or obtain such material permits or approvals or comply with conditions
thereof may lead to imposition of fees, charges, fines or penalties, or result in the interruption of our
operations, suspension and revocation or permits and licenses, which may and may have a material
adverse effect on our business and operations, financial condition and results of operations.

8. Our Company is subject to periodic inspections by the RBI. Non-compliance with observations made
during any such inspections could result in penalties and fines on our Company and could adversely
affect the business of our Company.

Our Company is subject to periodic inspections by the RBI of our Company’s books of accounts and
other records for the purpose of verifying the correctness or completeness of any statement, information
or particulars furnished to the RBI or for obtaining any information, which our Company have failed to
furnish when called upon to do so. The RBI conducts an annual inspection of our Company’s books of
accounts and other records relating to our financial position every year under Section 45N of the RBI
Act. RBI inspections are a regular exercise and are carried out periodically by RBI for banks, financial
institutions and NBFCs. Any major failure to meet the RBI’s directions could materially and adversely
affect our Company’s pending applications or requests with the RBI and our Company’s ability to obtain
the regulatory permits and approvals required to expand our business or result in the interruption of all
or some of our Company’s operations, which could have a material adverse effect on our Company’s
business, financial condition and results of operations.

9. Any regulatory actions and penalties for any past or future non-compliance may adversely affect our
business or reputation, or both.

We have to comply with numerous regulatory filings, maintenance of record under the Companies Act,

| 25 |
 2013, Securities Exchange Board of India (Listing Obligations and Disclosure Requirements),
Regulations 2015, Securities Exchange Board of India (Substantial Acquisition of Shares and Takeover)
Regulation, 2011 and any other laws and regulation as applicable. While we have been generally
compliant and there have been no penalties in the form of fines or other punitive action in the past, any
non -compliance of the applicable laws may impose the penalty on the Company. Such a penalty may
impact the profitability of the Company.

10. We operate in a competitive industry and our failure to successfully compete may adversely affect our
business, financial condition and results of operations, and prospects.

The NBFC Sector is highly competitive. We compete against various domestic companies and some of
our competitors may have larger financial resources or access to lower cost funds. They may also benefit
from greater economies of scale and operating efficiencies. Whilst we have sufficient track record and
experience if we are unable to compete effectively with competitors, we may be unable to sustain or
increase our volume of order intake. This Competition may result in reduced revenues, reduced margins
and loss of market share. Failure to compete successfully against current or future competitors could
harm our business, operating cash flows and financial condition.

11. We may not be able to prevent others from unauthorized use of our intellectual property and may in
the future become subject to trademark and/or other intellectual property infringement claims.

Intellectual property and other proprietary rights are important to the success of our business. Our ability
to compete effectively is dependent in part upon our ability to obtain, maintain, protect, and enforce our
intellectual property and other proprietary rights and to obtain licenses to use the intellectual property
and proprietary rights of others, as may be required. However, we cannot assure you that our intellectual
property and other proprietary rights under such applications are sufficiently protected. Nonetheless, the
steps we take to obtain, maintain, protect, and enforce our intellectual property and other proprietary
rights may be inadequate. We cannot assure that any future trademark, or service mark registrations will
be issued for our pending or future applications or that any of our current or future copyrights,
trademarks, or service marks (whether registered or unregistered) will be valid, enforceable, sufficiently
broad in scope, provide adequate protection of our intellectual property or other proprietary rights, or
provide us with any competitive advantage.

We may be unable to prevent competitors or other third parties from acquiring or using trademarks,
service marks, or other intellectual property or other similar proprietary rights, infringe upon,
misappropriate, dilute, or otherwise violate or diminish the value of our trademarks and service marks
and our other intellectual property and proprietary rights. In addition, we cannot guarantee we have
entered into agreements containing obligations of confidentiality with each party that has or may have
had access to proprietary information, know-how, or trade secrets owned or held by us. Moreover, our
contractual arrangements may not effectively prevent disclosure of, or control access to, our confidential
or otherwise proprietary information or provide an adequate remedy in the event of an unauthorized
disclosure. The measures we have put in place may not prevent misappropriation, infringement, or other
violation of our intellectual property or other proprietary rights or information and any resulting loss of
competitive advantage, and we may be required to litigate to protect our intellectual property or other
proprietary rights or information from misappropriation, infringement, or other violation by others,
which may be expensive, could cause a diversion of resources, and may not be successful, even when
our rights have been infringed, misappropriated, or otherwise violated.

Furthermore, the legal standards relating to the validity, enforceability, and scope of protection of
intellectual property and other proprietary rights are still evolving. Our intellectual property and other
proprietary rights may not be sufficient to provide us with a competitive advantage and the value of our
intellectual property and other proprietary rights could also diminish if others assert rights therein or
ownership thereof, and we may be unable to successfully resolve any such conflicts in our favor or to
our satisfaction. Any failure to maintain, protect or enforce our intellectual property and other proprietary
rights may adversely affect our business.

| 26 |
12. Our Company recently submitted an application for reclassification of 27 members of our Promoter
Group to be included under the category of Public Shareholders. Post the approval, this
reclassification shall lead to a shift in the ownership structure of our Company.

Several individuals and entities who are classified as members of our promoter group had intimated the
Company of their intention to apply for reclassification from Promoter Group to Public Shareholder and
the same was intimated within 24 hours to the Stock Exchange on June 26, 2024. The Company
subsequently submitted an application with Stock Exchange for reclassification on August 07, 2024. The
reclassification if approved shall lead to a reduction of the promoter and promoter group’s control from
72.11% to 59.21%. This reclassification reflects a shift in the ownership structure of the company and
may have significant implications for our governance and management practices.

13. Holding of the investors may be diluted by additional issuances of equity by us, which may have an
impact on the market price of our Equity Shares.

Any future issuance of our Equity Shares may dilute the holdings of investors in our Equity Shares,
which could adversely affect the market price of our Equity Shares. Additionally, sales of a large number
of our Equity Shares by our principal shareholder could adversely affect the market price of our Equity
Shares. The perception that any such sale may occur could also adversely affect the market price of our
Equity Shares.

14. We are subject to cyber security risks and security breaches and may incur increasing costs in an
effort to minimize those risks and to respond to cyber incidents.

A number of other companies have disclosed cyber-attacks and security breaches, some of which have
involved intentional attacks. Attacks may be targeted at us, our customers, or both. Although we devote
significant resources to maintain and regularly upgrade our systems and processes that are designed to
protect the security of our computer systems, software, networks and other technology assets and the
confidentiality, integrity and availability of information belonging to us and our customers, our security
measures may not provide absolute security. Despite our efforts to ensure the integrity of our systems, it
is possible that we may not be able to anticipate or to implement effective preventive measures against
all security breaches of these types, especially because the techniques used change frequently or are not
recognized until launched, and because cyber-attacks can originate from a wide variety of sources,
including third parties outside the Company such as persons who are involved with organized crime or
associated with external service providers or who may be linked to terrorist organizations or hostile
foreign governments. A successful penetration or circumvention of the security of our systems could
cause serious negative consequences, including significant disruption of our operations,
misappropriation of our confidential information or that of our customers, or damage to our computers
or systems or those of our customers and counterparties, and could result in violations of applicable
privacy and other laws, financial loss to us or to our customers, loss of confidence in our security
measures, customer dissatisfaction, significant litigation exposure, and affect to our reputation, all of
which could have a material adverse effect on us.

Our servers are also vulnerable to computer viruses, physical or electronic break-ins, and similar
disruptions. We may need to expend significant resources to protect against security breaches or to
address problems caused by breaches. Security breaches, including any breach of our systems or by
persons with whom we have commercial relationships that result in the unauthorized release of
customers’ or businesses’ personal information, could damage our reputation and expose us to a risk of
loss or litigation and possible liability.

15. Our inability to completely detect money laundering and other illicit actions or detect the same in a
timely manner or at all may expose us to extra responsibility and affect our business and reputation.

In India, we must follow all applicable anti-money laundering ("AML") and anti-terrorism laws and
regulations. We bear the risk of failing to follow the statutory know your customer ("KYC")
requirements, as well as fraud and money laundering by dishonest customers, in the ordinary course of
our business. Despite having internal rules, processes, and controls in place to prevent and identify any
AML activity and maintain KYC compliance, we cannot guarantee that we will be able to entirely

| 27 |
 manage instances of any possible or attempted violation. Any failure or ineffectiveness of our control
system to detect such activities completely and immediately may subject us to regulatory action,
including fines and penalties, and have a negative impact on our business and reputation.

16. As we expand our lending business, we may encounter asset-liability mismatches, which might
negatively impact our cash flows, financial condition, and results of operations.

As we expand our lending operations, we may encounter liquidity concerns due to mismatches in the
maturity of our assets and obligations. If we are unable to obtain additional borrowings or renew our
existing credit facilities in a timely and cost-effective manner, or at all, for matching tenures of our loan
portfolio, it may result in mismatches between our assets and liabilities, which could harm our cash flows,
financial condition, and results of operations.

17. Failure to stay up to date with technological changes, as well as the uses and regulation of the internet,
might be detrimental to our Company.

The industry of delivering finance products and services via a mobile app or the internet is dynamic and
fresh. We must keep up with changing technical breakthroughs, customer and small company usage
habits, internet security threats, system failure or inadequacy hazards, and governmental regulation and
taxation, all of which could have a negative influence on our Company. If we are unable to adequately
react to such developments, decreased demand for loans as a result of higher savings or income could
result in a loss of revenues or a fall in profitability. The demand for loan products in the markets we serve
could fall as a result of a variety of factors, including regulatory restrictions that limit customer access to
specific products, the availability of competing or alternative products, or changes in customers' financial
circumstances, such as increases in income or savings. A shift in focus from borrowing to saving would
also lessen demand. Our revenues could be severely reduced if we fail to adjust to a significant change
in our clients' desire for, or access to, our financing products. Customers may refuse or reject products
whose changes make them less appealing or less available, even if we make adjustments or launch new
products to meet customer demand.

18. We have not commissioned an industry report for the disclosures made in the section titled ‘Industry
Overview’ and made disclosures based on the data available on the internet and such third-party data
has not been independently verified by us.

We have neither commissioned an industry report nor sought consent from the quoted website source for
the disclosures which need to be made in the section titled “Industry Overview” on page 55 of this Letter
of Offer. We have made disclosures in the said section based on the relevant industry related data
available online for which relevant consents have not been obtained. We have not independently verified
such third-party data. We cannot assure you that any assumptions made are correct or will not change
and, accordingly, our position in the market may differ from that presented in this Letter of Offer. Further,
the industry data mentioned in this Letter of Offer or sources from which the data has been collected are
not recommendations to invest in our Company. Accordingly, investors should read the industry related
disclosure in this Letter of Offer in this context.

19. The COVID-19 pandemic may in the future, and any similar pandemic situations that may arise in
the future, have a material adverse impact on our business, results of operations, financial condition
and cash flows.

The global spread and unprecedented impact of the COVID-19 pandemic continues to create significant
volatility, uncertainty and economic disruption. The pandemic and the potential of another pandemic has
led governments and other authorities around the world to implement significant measures intended to
control the spread of the virus, including lockdowns, shelter-in-place orders, social distancing measures,
business closures or restrictions on operations, quarantines, travel bans and restrictions and multi-step
policies with the goal of re-opening these markets. These responsive measures have severely impacted
the delivery schedules of various orders/jobs under execution by the Company.

The scope, duration, and frequency of the measures implemented, and the adverse effects of COVID-19
remain uncertain and could be severe. However, the Company has tried to cope up with the situation to
avoid and not to have an adverse effect on the cash flow and financial position of the Company.

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ISSUE SPECIFIC RISK

20. SEBI has, by way of circulars dated January 22, 2020, May 6, 2020, July 24, 2020, January 19, 2021,
April 22, 2021 and October 1, 2021 streamlined the process of rights issues. You should follow the
instructions carefully as stated in such SEBI circulars and in this Letter of Offer.

The concept of crediting Rights Entitlements into the demat accounts of the Eligible Equity Shareholders
has recently been introduced by the SEBI. Accordingly, the process for such Rights Entitlements has
been recently devised by capital market intermediaries. Eligible Equity Shareholders are encouraged to
exercise caution, carefully follow the requirements as stated in the SEBI circulars dated January 22, 2020,
May 6,2020, July 24, 2020, January 19, 2021, and April 22, 2021, October 1, 2021, and ensure
completion of all necessary steps in relation to providing/updating their demat account details in a timely
manner. For details, please refer to "Terms of the Issue" beginning on page 182 of this Letter of Offer.

In accordance with Regulation 77A of the SEBI ICDR Regulations read with the SEBI Rights Issue
Circular, the credit of Rights Entitlements and Allotment of Rights Equity Shares shall be made in
dematerialized form only. Prior to the Issue Opening Date, our Company shall credit the Rights
Entitlements to (i) the demat accounts of the Eligible Equity Shareholders holding the Equity Shares in
dematerialised form; and (ii) a demat suspense escrow account (namely, " Purple Finance Limited
Unclaimed Shares Suspense Account ") opened by our Company, for the Eligible Equity Shareholders
which would comprise Rights Entitlements relating to (a) Equity Shares held in a demat suspense account
pursuant to Regulation 39 of the SEBI Listing Regulations; or (b) Equity Shares held in the account of
IEPF authority; or (c) the demat accounts of the Eligible Equity Shareholder which are frozen or details
of which are unavailable with our Company or with the on the Record Date; or (d) credit of the Rights
Entitlements returned/reversed/failed; or (e) the ownership of the Equity Shares currently under dispute,
including any court proceedings.

21. The Rights Entitlement of Eligible Equity Shareholders holding Equity Shares in physical form
("Physical Shareholder") may lapse in case they fail to furnish the details of their demat account to
the Registrar.

In accordance with the SEBI Circular SEBI/HO/CFD/DIL2/CIR/P/2020/13 dated January 22, 2020, the
credit of Rights Entitlement and Allotment of Equity Shares shall be made in dematerialised form only.
Accordingly, the Rights Entitlements of the Physical Shareholders shall be credited in a suspense escrow
de-mat account opened by our Company during the Issue Period. The Physical Shareholders are
requested to furnish the details of their de-mat account to the Registrar not later than two Working Days
prior to the Issue Closing Date to enable the credit of their Rights Entitlements in their de-mat accounts
at least one day before the Issue Closing Date. The Rights Entitlements of the Physical Shareholders who
do not furnish the details of their demat account to the Registrar not later than two Working Days prior
to the Issue Closing Date, shall lapse. Further, pursuant to a press release dated December 3, 2018 issued
by the SEBI, with effect from April 1, 2019, a transfer of listed Equity Shares cannot be processed unless
the Equity Shares are held in dematerialized form (except in case of transmission or transposition of
Equity Shares).

22. Failure to exercise or sell the Rights Entitlements will cause the Rights Entitlements to lapse without
compensation and result in a dilution of shareholding.

Rights Entitlements that are not exercised prior to the end of the Issue Closing Date will expire and
become null and void, and Eligible Equity Shareholders will not receive any consideration for them. The
proportionate ownership and voting interest in our Company of Eligible Equity Shareholders who fail
(or are not able) to exercise their Rights Entitlements will be diluted. Even if you elect to sell your
unexercised Rights Entitlements, the consideration you receive for them may not be sufficient to fully
compensate you for the dilution of your percentage ownership of the equity share capital of our Company
that may be caused as a result of the Issue. Renouncees may not be able to apply in case of failure in
completion of renunciation through off-market transfer in such a manner that the Rights Entitlements are
credited to the demat account of the Renouncees prior to the Issue Closing Date. Further, in case, the
Rights Entitlements do not get credited in time, in case of On Market Renunciation, such Renouncee will

| 29 |
 not be able to apply in this Issue with respect to such Rights Entitlements. For details, please refer to
"Terms of the Issue" beginning on page 182 of this Letter of Offer.

23. Any future issuance of Equity Shares, or convertible securities or other equity-linked securities by our
Company may dilute your shareholding and any sale of Equity Shares by our Promoter or members
of our Promoter Group may adversely affect the trading price of the Equity Shares.

Any future issuance of the Equity Shares, convertible securities or securities linked to the Equity Shares
by our Company may dilute your shareholding in our Company; adversely affect the trading price of the
Equity Shares and our ability to raise capital through an issue of our securities. In addition, any perception
by investors that such issuances or sales might occur could also affect the trading price of the Equity
Shares. We cannot assure you that we will not issue additional Equity Shares. The disposal of Equity
Shares by any of our Promoter and Promoter Group, or the perception that such sales may occur may
significantly affect the trading price of the Equity Shares. We cannot assure you that our Promoter and
Promoter Group will not dispose of, pledge or encumber their Equity Shares in the future.

24. You may be subject to Indian taxes arising out of capital gains on the sale of the Equity Shares.

Under current Indian tax laws, unless specifically exempted, capital gains arising from the sale of equity
shares of an Indian company are generally taxable in India. Accordingly, you may be subject to payment
of long-term capital gains tax in India, in addition to payment of STT, on the sale of any Equity Shares
held for more than 12 months. STT will be levied on and collected by a domestic stock exchange on
which the Equity Shares are sold. Further, any gain realized on the sale of listed equity shares held for a
period of 12 months or less will be subject to short-term capital gains tax in India. Capital gains arising
from the sale of the Equity Shares may be partially or completely exempt from taxation in India in cases
where such exemption is provided under a treaty between India and the country of which the seller is a
resident. Generally, Indian tax treaties do not limit India’s ability to impose tax on capital gains. As a
result, residents of other countries may be liable for tax in India as well as in their own jurisdiction on
gains made upon the sale of the Equity Shares.

25. There is no guarantee that our Equity Shares will be listed in a timely manner or at all which may
adversely affect the trading price of our Equity Shares.

In accordance with Indian law and practice, final approval for listing and trading of the Equity Shares
will not be granted by the Stock Exchanges until after those Equity Shares have been issued and allotted.
Approval will require all relevant documents authorizing the issuing of Equity Shares to be submitted.
There could be a failure or delay in listing the Equity Shares on Stock Exchanges. Any failure or delay
in obtaining the approval would restrict your ability to dispose of your Equity Shares. Further, historical
trading prices, therefore, may not be indicative of the prices at which the Equity Shares will trade in the
future which may adversely impact the ability of our shareholders to sell the Equity Shares or the price
at which shareholders may be able to sell their Equity Shares at that point of time.

26. Holders of Equity Shares could be restricted in their ability to exercise pre-emptive rights under Indian
law and could thereby suffer future dilution of their ownership position.

Under the Companies Act, any company incorporated in India must offer its holders of equity shares pre-
emptive rights to subscribe and pay for a proportionate number of shares to maintain their existing
ownership percentages prior to the issuance of any new equity shares, unless the pre-emptive rights have
been waived by the adoption of a special resolution by holders of three-fourths of the shares voted on
such resolution, unless our Company has obtained government approval to issue without such rights.
However, if the law of the jurisdiction that you are in does not permit the exercise of such pre-emptive
rights without us filing an offering document or registration statement with the applicable authority in
such jurisdiction, you will be unable to exercise such pre-emptive rights unless we make such a filing.
We may elect not to file a registration statement in relation to pre-emptive rights otherwise available by
Indian law to you. To the extent that you are unable to exercise pre-emptive rights granted in respect of
the Equity Shares, your proportional interests in us would be reduced.

| 30 |
27. Fluctuation in the exchange rate between the Indian Rupee and foreign currencies may adversely
affect the value of our Equity Shares, independent of our operating results.

On listing, our Equity Shares will be quoted in Indian Rupees on the Stock Exchanges. Any dividends in
respect of our Equity Shares will also be paid in Indian Rupees and subsequently converted into the
relevant foreign currency for repatriation, if required. Any adverse movement in currency exchange rates
during the time that it takes to undertake such conversion may reduce the net dividend to foreign
investors. In addition, any adverse movement in currency exchange rates during a delay in repatriating
outside India the proceeds from a sale of Equity Shares, for example, because of a delay in regulatory
approvals that may be required for the sale of Equity Shares may reduce the proceeds received by equity
shareholders. For example, the exchange rate between the Rupee and the U.S. dollar has fluctuated
substantially in recent years and may continue to fluctuate substantially in the future, which may
adversely affect the trading price of our Equity Shares and returns on our Equity Shares, independent of
our operating results.

28. Sale of Equity Shares by our Promoter or other significant shareholder(s) may adversely affect the
trading price of the Equity Shares.

Any instance of disinvestments of equity shares by our Promoter or by other significant shareholder(s)
may significantly affect the trading price of our Equity Shares. Further, our market price may also be
adversely affected even if there is a perception or belief that such sales of Equity Shares might occur.

29. Rights of shareholders under Indian laws may be more limited than under the laws of other
jurisdictions.

Indian legal principles related to corporate procedures, directors’ fiduciary duties and liabilities, and
shareholders’ rights may differ from those that would apply to a company in another jurisdiction.
Shareholders’ rights including in relation to class actions, under Indian law may not be as extensive as
shareholders’ rights under the laws of other countries or jurisdictions. Investors may have more difficulty
in asserting their rights as shareholder in an Indian company than as shareholder of a corporation in
another jurisdiction.

EXTERNAL RISK FACTOR

30. Significant differences exist between Ind AS, Indian GAAP and other accounting principles, such as
US GAAP and International Financial Reporting Standards ("IFRS"), which investors may be more
familiar with and consider material to their assessment of our financial condition.

Summary statements of assets and liabilities as at March 31, 2024; March 31, 2023; and March 31, 2022
and summary statements of profit and loss (including other comprehensive income), cash flows and
changes in equity for the Fiscals 2024, 2023, and 2022 along with the limited reviewed unaudited
financial results for the three months period ending on June 30, 2024 have been prepared in accordance
with the Indian Accounting Standards notified under Section 133 of theCompanies Act, 2013, read with
the Ind AS Rules and, the SEBI Circular and the Prospectus Guidance Note.

We have not attempted to quantify the impact of US GAAP, IFRS or any other system of accounting
principles on the financial data included in this Letter of Offer, nor do we provide a reconciliation of our
financial statements to those of US GAAP, IFRS or any other accounting principles. US GAAP and IFRS
differ in significant respects from Ind AS and Indian GAAP. Accordingly, the degree to which the
Financial Information included in this Letter of Offer will provide meaningful information is entirely
dependent on the reader’s level of familiarity with Ind AS, Indian GAAP and the SEBI ICDR
Regulations. Any reliance by persons not familiar with Indian accounting practices on the financial
disclosures presented in this Letter of Offer should accordingly be limited.

31. Political, economic or other factors that are beyond our control may have adversely affect our business
and results of operations.

The Indian economy is influenced by economic developments in other countries. These factors could

| 31 |
 depress economic activity which could have an adverse effect on our business, financial condition and
results of operations. Any financial disruption could have an adverse effect on our business and future
financial performance.

We are dependent on domestic, regional, and global economic and market conditions. Our performance,
growth and market price of our Equity Shares are and will be dependent to a large extent on the health
of the economy in which we operate. There have been periods of slowdown in the economic growth of
India. Demand for our services may be adversely affected by an economic downturn in domestic,
regional, and global economies.

Economic growth is affected by various factors including domestic consumption and savings, balance of
trade movements, namely export demand and movements in key imports, global economic uncertainty
and liquidity crisis, volatility, in exchange currency rates, and annual rainfall which affects agricultural
production.

Consequently, any future slowdown in the Indian economy could harm our business, results of operations
and financial condition. Also, a change in the government or a change in the economic and deregulation
policies could adversely affect economic conditions prevalent in the areas in which we operate in general
and our business in particular and high rates of inflation in India could increase our costs without
proportionately increasing our revenues, and as such decrease our operating margins.

32. A slowdown in economic growth in India could cause our business to suffer.

We are incorporated in India, and all of our assets and employees are located in India. As a result, we are
highly dependent on prevailing economic conditions in India and our results of operations are
significantly affected by factors influencing the Indian economy. A slowdown in the Indian economy
could adversely affect our business, including our ability to grow our assets, the quality of our assets,
and our ability to implement our strategy.

Factors that may adversely affect the Indian economy, and hence our results of operations, may include:
• any increase in Indian interest rates or inflation;
• any scarcity of credit or other financing in India;
• prevailing income conditions among Indian consumers and Indian corporations;
• changes in India’s tax, trade, fiscal or monetary policies;
• political instability, terrorism or military conflict in India or in countries in the
region orglobally, including in India’s various neighboring countries;
• prevailing regional or global economic conditions; and
• other significant regulatory or economic developments in or affecting India

Any slowdown in the Indian economy or in the growth of the sectors we participate in or future volatility
in global commodity prices could adversely affect our borrowers and contractual counterparties. This in
turn could adversely affect our business and financial performance and the price of our Equity Shares.

33. Changing laws, rules and regulations and legal uncertainties, including adverse application of
corporate and tax laws, may adversely affect our business, prospects and results of operations.

The regulatory and policy environment in which we operate is evolving and subject to change. Such
changes, including the instances mentioned below, may adversely affect our business, results of
operations and prospects, to the extent that we are unable to suitably respond to and comply with any
such changes in applicable law and policy.

The Government of India has issued a notification dated September 29, 2016 notifying Income
Computation and Disclosure Standards ("ICDS"), thereby creating a new framework for the computation
of taxable income. The ICDS became applicable from the assessment year for Fiscal 2018 and subsequent
years. The adoption of ICDS is expected to significantly alter the way companies compute their taxable
income, as ICDS deviates from several concepts that are followed under general accounting standards,
including Indian GAAP and Ind AS. In addition, ICDS shall be applicable for the computation of income

| 32 |
 for tax purposes but shall not be applicable for the computation of income for minimum alternate tax.
There can be no assurance that the adoption of ICDS will not adversely affect our business, results of
operations and financial condition:

• the General Anti Avoidance Rules ("GAAR") have been made effective from April 1, 2017.
The tax consequences of the GAAR provisions being applied to an arrangement could result
indenial of tax benefit amongst other consequences. In the absence of any precedents on the
subject, the application of these provisions is uncertain. If the GAAR provisions are made
applicable to our Company, it may have an adverse tax impact on us.

• a comprehensive national GST regime that combines taxes and levies by the Central and State
Governments into a unified rate structure, which came into effect from July 1, 2017. We cannot
provide any assurance as to any aspect of the tax regime following implementation of the GST.
Any future increases or amendments may affect the overall tax efficiency of companies
operating in India and may result in significant additional taxes becoming payable. If, as a result
of a particular tax risk materializing, the tax costs associated with certain transactions are greater
than anticipated, it could affect the profitability of such transactions.

In addition, unfavorable changes in or interpretations of existing, or the promulgation of new laws, rules
and regulations including foreign investment laws governing our business, operations and group
structure could result in us being deemed to be in contravention of such laws or may require us to apply
for additional approvals. We may incur increased costs and other burdens relating to compliance with
such new requirements, which may also require significant management time and other resources, and
any failure to comply may adversely affect our business, results of operations and prospects. Uncertainty
in the applicability, interpretation or implementation of any amendment to, or change in, governing law,
regulation or policy, including by reason of an absence, or a limited body, of administrative or judicial
precedent may be time consuming as well as costly for us to resolve and may affect the viability of our
current business or restrict our ability to grow our business in the future.

Any increase in taxes and levies, or the imposition of new taxes and levies in the future, could increase
the cost of production and operating expenses. Taxes and other levies imposed by the central or state
governments in India that affect our industry include customs duties, excise duties, sales tax, income tax
and other taxes, duties or surcharges introduced on a permanent or temporary basis from time to time.
The central and state tax scheme in India is extensive and subject to change from time to time. Any
adverse changes in any of the taxes levied by the central or state governments may adversely affect our
competitive position and profitability.

34. Financial instability in both Indian and international financial markets could adversely affect our
results of operations and financial condition.

The Indian financial market and the Indian economy are influenced by economic and market conditions
in other countries, particularly in emerging market in Asian countries. Financial turmoil in Asia, Europe,
the United States and elsewhere in the world in recent years has affected the Indian economy. Although
economic conditions are different in each country, investors’ reactions to developments in one country
can have an adverse effect on the securities of companies in other countries. A loss in investor confidence
in the financial systems of other emerging markets may cause increased volatility in in the Indian
economy in general. Any global financial instability, including further deterioration of credit conditions
in the U.S. market, could also have a negative impact on the Indian economy. Financial disruptions may
occur again and could harm our results of operations and financial condition.

The Indian economy is also influenced by economic and market conditions in other countries. This
includes, but is not limited to, the conditions in the United States, Europe, and certain economies in Asia.
Financial turmoil in Asia and elsewhere in the world in recent years has affected the Indian economy.
Any worldwide financial instability may cause increased volatility in the Indian financial markets and
directly or indirectly, adversely affect the Indian economy and financial sector and its business.

Although economic conditions vary across markets, loss of investor confidence in one emerging
economy may cause increased volatility across other economies, including India. Financial instability in

| 33 |
 other parts of the world could have a global influence and thereby impact the Indian economy. Financial
disruptions in the future could adversely affect our business, prospects, financial condition and results of
operations. The global credit and equity markets have experienced substantial dislocations, liquidity
disruptions and market corrections.

There are concerns that a tightening of monetary policy in emerging markets and some developed
markets will lead to a moderation in global growth. In response to such developments, legislators and
financial regulators in the United States and other jurisdictions, including India, have implemented a
number of policy measures designed to add stability to the financial markets. However, the overall long-
term impact of these and other legislative and regulatory efforts on the global financial markets is
uncertain, and they may not have had the intended stabilizing effects. Any significant financial disruption
in the future could have an adverse effect on our cost of funding, loan portfolio, business, future financial
performance and the trading price of the Equity Shares.

35. Inflation in India could have an adverse effect on our profitability and if significant, on our financial
condition.

Inflation rates in India have been volatile in recent years, and such volatility may continue in the future.
India has experienced high inflation in the recent past. Increased inflation can contribute to an increase
in interest rates and increased costs to our business, including increased costs of salaries, and other
expenses relevant to our business.

High fluctuations in inflation rates may make it more difficult for us to accurately estimate or control our
costs. Any increase in inflation in India can increase our expenses, which we may not be able to pass on
to our customers, whether entirely or in part, and the same may adversely affect our business and financial
condition. In particular, we might not be able to reduce our costs or increase our rates to pass the increase
in costs on to our customers. In such case, our business, results of operations, cash flows and financial
condition may be adversely affected.

Further, the GOI has previously initiated economic measures to combat high inflation rates, and it is
unclear whether these measures will remain in effect. There can be no assurance that Indian inflation
levels will not worsen in the future.

36. Foreign investors are subject to foreign investment restrictions under Indian law that limits our ability
to attract foreign investors, which may adversely impact the market price of the Equity Shares.

As an Indian Company, we are subject to exchange controls that regulate borrowing in foreign
currencies, including those specified under FEMA. Such regulatory restrictions limit our financing
sources and hence could constrain our ability to obtain financing on competitive terms and refinance
existing indebtedness. In addition, we cannot assure you that the required approvals will be granted to us
without onerous conditions, or at all. Limitations on foreign debt may adversely affect our business
growth, results of operations and financial condition.

Further, under the foreign exchange regulations currently in force in India, transfers of shares between
non- residents and residents are freely permitted (subject to certain exceptions) if they comply with the
pricing guidelines and reporting requirements specified by the RBI. If the transfer of shares, which are
sought to be transferred, is not in compliance with such pricing guidelines or reporting requirements or
fall under any of the exceptions referred to above, then the prior approval of the RBI will be required.
Additionally, shareholders who seek to convert the Rupee proceeds from a sale of shares in India into
foreign currency and repatriate that foreign currency from India will require a no objection/ tax clearance
certificate from the income tax authority. There can be no assurance that any approval required from the
RBI or any other government agency can be obtained on any particular terms or at all.

37. Any downgrading of India’s debt rating by an independent agency may harm our ability to raise
financing.

Any adverse revisions to India’s credit ratings international debt by international rating agencies may
adversely affect our ability to raise additional overseas financing and the interest rates and other

| 34 |
 commercial terms at which such additional financing is available. This could have an adverse effect on
our ability to fund our growth on favourable terms or at all, and consequently adversely affect our
business and financial performance and the price of our Equity Shares.

38. The occurrence of natural or man-made disasters could adversely affect our results of operations,
cash flows and financial condition. Hostilities, terrorist attacks, civil unrest and other acts of violence
could adversely affect the financial markets and our business.

The occurrence of natural disasters, including cyclones, storms, floods, earthquakes, tsunamis, tornadoes,
fires, explosions, pandemic disease and man-made disasters, including acts of terrorism and military
actions, could adversely affect our results of operations, cash flows or financial condition. In addition,
any deterioration in international relations, especially between India and its neighbouring countries, may
result in investor concern regarding regional stability which could adversely affect the price of the Equity
Shares. In addition, India has witnessed local civil disturbances in recent years, and it is possible that
future civil unrest as well as other adverse social, economic or political events in India could have an
adverse effect on our business.

Such incidents could also create a greater perception that investment in Indian companies involves a
higher degree of risk and could have an adverse effect on our business and the market price of the Equity
Shares.

39. We are subject to regulatory, economic, social and political uncertainties and other factors beyond
our control.

We are incorporated in India, and we conduct our corporate affairs and our business in India.
Consequently, our business, operations, financial performance will be affected by interest rates,
government policies, taxation, social and ethnic instability and other political and economic
developments affecting India.

Factors that may adversely affect the Indian economy, and hence our results of operations may include:
• any exchange rate fluctuations, the imposition of currency controls and restrictions on the right
to convert or repatriate currency or export assets;
• any scarcity of credit or other financing in India, resulting in an adverse effect on economic
conditions in India and scarcity of financing for our expansions;
• prevailing income conditions among Indian customers and Indian corporations;
• epidemic or any other public health in India or in countries in the region or globally, including
in India’s various neighboring countries;
• hostile or war like situations with the neighboring countries;
• macroeconomic factors and central bank regulation, including in relation to interest rates
movements which may in turn adversely impact our access to capital and increase our borrowing
costs;
• decline in India’s foreign exchange reserves which may affect liquidity in the Indian economy;
• downgrading of India’s sovereign debt rating by rating agencies;
• difficulty in developing any necessary partnerships with local businesses on commercially
acceptable terms and/or a timely basis; and

Any slowdown or perceived slowdown in the Indian economy, or in specific sectors of the Indian
economy or certain regions in India, could adversely affect our business, results of operations and
financial condition and the price of the Equity Shares.

40. Financial instability in other countries may cause increased volatility in Indian financial markets.

The Indian market and the Indian economy are influenced by economic and market conditions in other
countries, particularly emerging market countries in Asia. Although economic conditions are different in
each country, investors’ reactions to developments in one country can have adverse effects on the
securities of companies in other countries, including India. A loss of investor confidence in the financial
systems of other emerging markets may cause increased volatility in Indian financial markets and,

| 35 |
indirectly, in the Indian economy in general. Any worldwide financial instability could also have a
negative impact on the Indian economy. Financial disruptions may occur again and could harm our
business, our future financial performance and the prices of the Equity Shares.

The recent outbreak of Novel Coronavirus has significantly affected financial markets around the world.
Any other global economic developments or the perception that any of them could occur may continue
to have an adverse effect on global economic conditions and the stability of global financial markets and
may significantly reduce global market liquidity and restrict the ability of key market participants to
operate in certain financial markets. Any of these factors could depress economic activity and restrict our
access to capital, which could have an adverse effect on our business, financial condition and results of
operations and reduce the price of our Equity Shares. Any financial disruption could have an adverse
effect on our business, future financial performance, shareholders’ equity and the price of our Equity
Shares.

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 SECTION III - INTRODUCTION

THE ISSUE

This Issue has been authorised through a resolution passed by our Board at its meeting held on June 20, 2024,
pursuant to Section 62(1)(a) of the Companies Act. The terms and conditions of the Issue including the rights
entitlement ratio, Issue Price, Record Date, timing of the Issue and other related matters, have been approved by
a resolution passed by the Finance Committee at its meeting held on September 20, 2024. The following is a
summary of this Issue, and it should be read in conjunction with, and is qualified entirely by, the information set
out in the chapter titled "Terms of the Issue" beginning on page 182 of this Letter of Offer.

Particulars Details of Equity Shares

Equity Shares proposed to be Up to 1,12,04,985 Equity Shares
issued
Rights Entitlement Up to 1 (One) Rights Equity Share for every 3 (Three) fully paid-up
Equity Shares held on the Record Date
Fractional Entitlement For Equity Shares being offered on a rights basis under the Issue, if the
shareholding of any of the Eligible Equity Shareholders is less than 3
Equity Shares or not in the multiple of 3, the fractional entitlement of
such Eligible Equity Shareholders shall be ignored in the computation
of the Rights Entitlement. However, Eligible Equity Shareholders
whose fractional entitlements are being ignored earlier will be given
preference in the Allotment of one additional Equity Share each, if such
Eligible Equity Shareholders have applied for additional Equity Shares
over and above their Rights Entitlement, if any
Record Date Thursday, September 26, 2024
Face value per Equity Shares ₹10/-
Issue Price per Rights ₹40/- per Equity Share (including a premium of ₹30/- per Equity Share)
Equity Shares
Issue Size Up to 1,12,04,985 Equity Shares of face value of ₹10/- each for cash at
a price of ₹40/- (including a premium of ₹30/-) per Rights Equity Share
not exceeding ₹4,481.99 Lakhs#^
Dividend Such dividend as may be declared by our Board and our shareholders,
as per applicable laws.
Equity Shares issued, subscribed 3,36,14,954 Equity Shares. For details, please refer to "Capital
and paid up prior to the Issue Structure" beginning on page 45 of this Letter of Offer.
Equity Shares subscribed and Up to 4,48,19,939# Equity Shares
paid-up after the Issue (assuming
full subscription for and allotment
of the Rights Entitlement)
Equity Shares outstanding after Up to 4,48,19,939 # Equity Shares
the Issue (assuming full
subscription for and Allotment of
the Rights Entitlement)
Money payable at the time of ₹40/- per Equity Share
Application
Scrip Details ISIN: INE0CYK01015
BSE: PURPLEFIN | 544191
CSE: 26505
ISIN for Rights Entitlements INE0CYK20015
Use of Issue Proceeds For details, please refer to "Object of the Issue" beginning on page 47
of this Letter of Offer.
Terms of the Issue For details, please refer to "Terms of the Issue" beginning on page 182
of this Letter of Offer.
Terms of Payment For details, please refer to "Terms of the Issue" beginning on page 182
of this Letter of Offer.
#
Assuming full subscription

| 37 |
^
To be adjusted as per the Rights Entitlement ratio

Please refer to the chapter titled "Terms of the Issue" on page 182 of this Letter of Offer.

Issue Schedule

The subscription will open upon the commencement of the banking hours and will close upon the close of banking
hours on the dates mentioned below:

Event Indicative Date

Issue Opening Date Friday, October 04, 2024
Last Date for On Market Renunciation** Tuesday October 08, 2024
Issue Closing Date* Friday, October 11, 2024
*
The Board of Directors/Finance Committee thereof will have the right to extend the Issue period as it may determine from time to time,
provided that the Issue will not remain open in excess of 30 (thirty) days from the Issue Opening Date.
**
Eligible Equity Shareholders are requested to ensure that renunciation through off-market transfer is completed in such a manner that the
Rights Entitlements are credited to the demat account of the Renouncees on or prior to the Issue Closing Date.

| 38 |
 GENERAL INFORMATION

Our Company, Purple Finance Limited ("Company") was originally incorporated as a Private Limited Company
under the name of "Devipura Balaji Securities & Investments Private Limited" under the provisions of the
Companies Act, 1956 vide Certificate of Incorporation dated November 09, 1993, issued by the Registrar of
Companies, Mumbai, Maharashtra. The Company was subsequently converted into Public Limited Company as
"Devipura Balaji Securities & Investments Limited" vide fresh Certificate of Incorporation dated July 20, 1998.
The Company was registered under section 45-IA of The Reserve Bank of India Act, 1934 and received the
certificate of registration from Reserve Bank of India ("RBI") dated July 20, 1999, having Registration no.
13.01268 to commence/ carry on the business of non-banking financial institution without accepting deposits. Our
Company is registered with RBI as a Base Layer Non-Systemically Important Non-Deposit taking Non-Banking
Finance Company (NBFC-ND-ICC).

Devipura Balaji Securities & Investments Limited acquired K K Financial Services Private Limited on September
13, 2013. Pursuant to the aforesaid acquisition, the Company applied for name change to Registrar of Companies,
Mumbai and received a Certificate of Registration approving change in name to ‘Purple Finance Limited’ vide
Certificate of Incorporation dated November 26, 2013.

The Hon'ble National Company Law Tribunal ("NCLT"), Mumbai Bench vide its Order dated February 15, 2024,
has approved the Scheme of Merger by Absorption of Canopy Finance Limited ("Transferor Company"/ "CFL")
by Purple Finance Limited ("Transferee Company"/ "Resulting Company"/ "PFL") and their respective
shareholders and creditors. Pursuant to the merger of the Company with CFL, the equity shares of the Company
have been listed on BSE Limited (“BSE”) w.e.f. June 14, 2024, and on The Calcutta Stock Exchange Limited
(“CSE”) w.e.f. June 18, 2024.

Registered Office of our Company

Room no. 11, 1st Floor, Indu Chambers 349/353,
Samuel Street, Vadgadi, Masjid Bunder (West),
Mumbai- 400 003,Maharashtra, India.
Telephone: 022-23430172

Corporate Office of our Company

705/706, 7th Floor, Hallmark Business Plaza,
Opposite Gurunanak Hospital, Bandra East,
Mumbai- 400051, Maharashtra, India.
Telephone: 022-69165100
Website: www.purplefinance.in
E-mail: compliance@purplefinance.in

Corporate Identity Number: L67120MH1993PLC075037

Registration Number: 075037

Address of the Registrar of Companies

Our Company is registered with the RoC, Mumbai, which is situated at the following address:

Registrar of Companies, Mumbai

100, Everest, Marine Drive,
Mumbai 400 002.

Company Secretary and Compliance Officer

Ruchi Nishar
705/706, 7th Floor, Hallmark Business Plaza,
Opposite Gurunanak Hospital, Bandra East,
Mumbai- 400051, Maharashtra, India.
Telephone: 022-69165100
E-mail: compliance@purplefinance.in

| 39 |
Board of Directors of our Company

Name Age Designation Address DIN

Amitabh Chaturvedi 56 Executive Chairman 2904, Tower 2B, Sumer 00057441
Trinity Tower, New
Prabhadevi Road, Mumbai-
400025
Rajeev Deoras 64 Executive Director 1906, D Wing, Rustomjee 02879519
Seasons, Nanasaheb
Dharmadhikari Road,
Bandra East, Mumbai-
400051
Minal Chaturvedi 59 Non-Executive 2904, Tower 2B, Sumer 05315800
Director Trinity Tower, New
Prabhadevi Road, Mumbai-
400025
Ajay Pandey 62 Independent Director 1402, Glendale, 00065622
Hiranandani Gardens,
Powai, Mumbai-400076
Sumeet Sandhu 47 Independent Director 528 F, Block F, Shaheed 10119062
Bhagat Singh Nagar, Model
Town (Ludhiana),
Ludhiana-141002.
Amit Sonawala 57 Independent Director 3/69, Al Jabreya Court, 1st 01790348
Floor, Marine Drive,
Mumbai – 400020

For detailed profile of our Directors, please refer to the chapter titled "Our Management" on page 84 of this Letter
of Offer.

Details of Key Intermediaries pertaining to this Issue of our Company

Lead Manager to the Issue

Mark Corporate Advisors Private Limited

404/1, The Summit Business Bay,
Sant Janabai Road,
Off Western Express Highway, Vile Parle (E),
Mumbai, Maharashtra, India – 400 057
Telephone: +91 22 2612 3207 / 22 2612 3208
Email: rightsissue@markcorporateadvisors.com
Website: www.markcorporateadvisors.com
Investor grievance e-mail: investorgrievance@markcorporateadvisors.com
Contact Person: Manish Gaur
SEBI Registration No.: INM000012128

Legal Advisor to the Issue

Rajani & Associates

Advocates and Solicitors
204-207, Krishna Chambers,
59, New Marine Lines,
Mumbai 400 020
Telephone: +91 22 4096 1000
E-mail: sangeeta@rajaniassociates.net
Contact Person: Sangeeta Lakhi

| 40 |
Registrar and Share Transfer Agent to the Company and the Issue

Purva Sharegistry (India) Private Limited

9, Shiv Shakti Industrial Estate,
J R Boricha Marg, Lower Parel (E),
Mumbai-400011, Maharashtra.
Telephone: 022-4961 4132 / 4970 0138
Email: support@purvashare.com
Website: https://www.purvashare.com/
Investor grievance e-mail: newissue@purvashare.com
Contact Person: Deepali Dhuri
SEBI Registration No.: INR000001112
Validity of Registration: Permanent

Banker to the Company

IDFC First Bank Limited

Address: Vibgyor Towers, C-62, Bandra Kurla Complex, Bandra East, Mumbai- 400051
Telephone Number: 022 - 71325654
Contact person: Abdullah Mehtab
Website: https://www.idfcfirstbank.com/
E-mail: abdullah.mehtab@idfcfirstbank.com

Banker to the Issue/ Escrow Collection Bank/ Refund Bank

ICICI BANK LIMITED

Address: Capital Market Division, 163, 5th Floor, Backbay Reclamation, Churchgate, Mumbai – 400 020
Telephone Number: +91 22 68052182
Contact person: Varun Badai
Website: www.icicibank.com
E-mail: varun.badai@icicibank.com /ipocmg@icicibank.com
SEBI Registration Number: INBI00000004

Statutory auditors of the Issuer

M/s Jogin Raval & Associates

Address: B-101/102, Shree Sai Towers CHS Ltd, Sodawala Lane,
Nutan Nagar, Borivali West, Mumbai- 400092
Firm Registration Number: 128586W
Membership No.: 122197
Contact Person: CA Jogin Raval
Telephone Number: 022- 28935855
E-mail: joginravalca@gmail.com
Peer Review Certificate Number: 017282

Experts

Our Company has received a written consent dated July 12, 2024 from our Statutory Auditors, M/s Jogin Raval
& Associates, to include their name in this Letter of Offer as an "expert", as defined under applicable laws, to the
extent and in their capacity as statutory auditors, and in respect of the reports issued by them and the Statement
of Tax Benefits, included in this Letter of Offer. Such consent has not been withdrawn as on the date of this Letter
of Offer.

| 41 |
Designated Intermediaries

Self-Certified Syndicate Banks

The list of banks that have been notified by SEBI to act as SCSBs or the SBA Process is provided at the website
of the SEBI https://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognised=yes and updated from time to
time. For details on Designated Branches of SCSBs collecting the Application Forms, refer to the website of the
SEBI https://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognised=yes. On allotment, the amount will
be unblocked, and the account will be debited only to the extent required to pay for the Rights Equity Shares
Allotted.

Inter-se Allocation of Responsibilities

Mark Corporate Advisors Pvt. Ltd., being the sole Lead Manager will be responsible for all the responsibilities
related to coordination and other related activities in relation to the Issue. Hence, there is no inter-se allocation of
responsibilities.

Credit Rating

This is an issue of Equity Shares; credit rating is, therefore, not required.

Debenture Trustees

This is an issue of Equity Shares; the appointment of debenture trustees is, therefore, not required.

Monitoring Agency

The Net Proceeds of the Issue will be less than ₹10,000 lakhs. The SEBI ICDR Regulations does not mandate
appointment of a monitoring agency for such issues. Our Company will, therefore, not appoint a monitoring
agency.

Underwriting Agreement

This Issue will not be underwritten, and our Company has, therefore, not entered into an underwriting
arrangement.

Appraising Entity

The objects of this Issue have not been appraised by any bank or any other independent financial institution or
any other independent agency.

Changes in Auditors during the last three years

Name of Address and E-mail Date of Appointment/ Reason

Auditor Cessation
Vasant Agre & Address: 10-11/ B2, Sai Prasad CHSL, B May 15, 2023 Expiry of term as
Associates Wing, Telly Gully Cross Road, Andheri East, Auditor of the
Mumbai- 400069. Company
Email: vagreca@gmail.com
M/s Jogin Raval Address: B 101/102, Shri Sai Tower CHS May 15, 2023 Appointment
& Associates Ltd, Sodawala Lane, Nutan Nagar, Borivali
West, Mumbai-400092
Email: joginravalca@gmail.com

| 42 |
Issue Schedule

Last Date for credit of Rights Entitlements Tuesday. October 01, 2024
Issue Opening Date Friday, October 04, 2024
Last date for On Market Renunciation# Tuesday, October 08, 2024

Issue Closing Date* Friday, October 11, 2024

Finalization of Basis of Allotment (on or about) Thursday, October 17, 2024
Date of Allotment (on or about) Friday, October 18, 2024
Date of credit (on or about) Tuesday, October 22, 2024
Date of listing (on or about) Wednesday, October 23, 2024
#
Eligible Equity Shareholders are requested to ensure that renunciation through off-market transfer is completed in such a manner that the
Rights Entitlements are credited to the demat account of the Renouncees on or prior to the Issue Closing Date.
*
Our Board, or a duly authorized committee thereof, will have the right to extend the Issue Period as it may determine from time to time but
not exceeding 30 days from the Issue Opening Date (inclusive of the Issue Opening Date). Further, no withdrawal of Application shall be
permitted by any Applicant after the Issue Closing Date.

Please note that if Eligible Equity Shareholders holding Equity Shares in physical form as on the Record Date
have not provided details of their demat accounts to our Company or to the Registrar, they must provide their
demat account details to our Company or the Registrar no later than two Working Days prior to the Issue Closing
Date, i.e., Friday, October 09, 2024 , to enable credit of the Rights Entitlements to their respective demat accounts
by transfer from the demat suspense escrow account, which will happen one day prior to the Issue Closing Date,
i.e., Friday, October 10, 2024.

Investors are advised to ensure that the Application Forms are submitted on or before the Issue Closing Date. Our
Company or the Registrar will not be liable for any loss on account of non-submission of Application Forms on
or before the Issue Closing Date. It is encouraged that the Application Forms are submitted well in advance before
the Issue Closing Date. For details on submitting Application Forms, please refer to "Terms of the Issue -
Procedure for Application" on page 184 of this Letter of Offer.

The details of the Rights Entitlements with respect to each Eligible Equity Shareholder may be accessed by such
respective Eligible Equity Shareholder on the website of the Registrar at https://www.purvashare.com/ after
keying in their respective details along with other security control measures implemented thereat. For further
details, please refer to "Terms of the Issue - Credit of Rights Entitlements in demat accounts of Eligible Equity
Shareholders" on page 195 of this Letter of Offer.

Please note that if no Application is made by the Eligible Equity Shareholders or the Renouncee of Rights
Entitlements on or before the Issue Closing Date, such Rights Entitlements shall lapse and shall be extinguished
after the Issue Closing Date. No Equity Shares for such lapsed Rights Entitlements will be credited, even if such
Rights Entitlements were purchased from the market or off-market and the purchaser will lose the premium paid,
if any, to acquire the Rights Entitlements. Persons who receive credit of the Rights Entitlements must make an
Application and apply for Equity Shares offered under Rights Issue, if they want to subscribe to the Equity Shares
offered under the Rights Issue.

Minimum Subscription

We have been informed by our Promoter and Promoter Group that they may or may not fully subscribe to their
entitlements arising out of the proposed Rights Issue and may renounce a part of their right entitlement in the
favour of third parties whom our Promoters and Promoter Group may identify in due course. Therefore, the non-
applicability of minimum subscription criteria provided in regulation 86(1)(b) of the SEBI ICDR Regulations is
not met by our Company. The requirement of minimum subscription of 90% of the Issue is thus applicable for the
proposed Rights Issue. Pursuant to regulation 86(2) of the SEBI ICDR Regulations in case of non-receipt of
minimum subscription, all application monies received shall be refunded to the applicants forthwith, but not later
than four days from the closure of the Rights Issue.

| 43 |
Filing

SEBI vide the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) (Fourth
Amendment) Regulations, 2020 has amended Regulation 3(b) of the SEBI ICDR Regulations as per which the
threshold for filing of Letter of Offer with SEBI for rights issues has been increased. The threshold of the rights
issue size under Regulation 3 (b) of the SEBI ICDR Regulations has been increased from Rupees one thousand
lakhs to Rupees five thousand lakhs. Since the size of this Issue falls below this threshold, the Letter of Offer has
been filed with BSE (Designated Stock Exchange) and CSE and not with SEBI. However, the Letter of Offer will
be submitted with SEBI for information and dissemination and will be filed with the Stock Exchanges.

| 44 |
 CAPITAL STRUCTURE

The Share Capital of our Company, as at the date of this Letter of Offer, and details of the Equity Shares proposed
to be issued in the Issue, and the issued, subscribed and paid-up share capital after the Issue, are set forth below:
(in ₹, except shares data)
Aggregate value Aggregate value at Issue
at Face Value Price
A AUTHORISED SHARE CAPITAL
5,06,00,000 Equity Shares of ₹ 10 each 50,60,00,000 -
B ISSUED, SUBSCRIBED AND PAID-UP SHARE CAPITAL BEFORE
THE ISSUE*
3,36,14,954 Equity Shares of ₹ 10 each 33,61,49,540 -
C PRESENT ISSUE IN TERMS OF THIS LETTER OF OFFER(1)
Up to 1,12,04,985 Equity Shares, each at a premium of ₹ 30 11,20,49,850 44,81,99,400
per Equity Share, i.e., at a price of ₹ 40 per Equity Share(2)
D ISSUED, SUBSCRIBED AND PAID-UP SHARE CAPITAL AFTER
THE ISSUE(3)
4,48,19,939 Equity Shares of ₹10 each fully paid-up 44,81,99,390
(1)
The Issue has been authorized by a resolution of our Board of Directors passed at its Meeting held on June 20, 2024, pursuant to Section 62 and 23 of the
Companies Act, 2013 and other applicable provisions.
(2)
Entire amount of ₹40/-/-per Equity Share (including premium of ₹30/-/-per Equity Share) is required to be paid at the time of application under the Rights Issue
(3)
Assuming full subscription by the Eligible Equity Shareholders of the Rights Equity Shares *Subject to finalization of Basis of Allotment and Allotment of Rights
Equity Shares.

Notes to the Capital Structure

1. Intention and extent of participation by our Promoter and Promoter Group in the Issue:

The Promoter and Promoter Group may or may not subscribe to their entitlements arising out of the
proposed Rights Issue and may renounce them in the favor of third parties. Therefore, the non-
applicability of minimum subscription criteria provided in regulation 86(1)(b) of the SEBI ICDR
Regulations may or may not be met. Minimum subscription is thus applicable for the proposed Rights
Issue. Pursuant to regulation 86(2) of the SEBI ICDR Regulations in case of non-receipt of minimum
subscription, all application monies received shall be refunded to the applicants forthwith, but not later
than four days from the closure of the Rights Issue.

For further details of our Application for the reclassification of our Promoter Group under Regulation
31A of SEBI (Listing Obligations and Disclosure Requirements), 2018, kindly refer to "Our Promoter
and Promoter Group" on page 96 of this Letter of Offer

2. The ex-rights price of the Equity Shares offered pursuant to this Issue and in compliance with the
valuation formula set out in Regulation 10(4)(b)(ii) of the Takeover Regulations is ₹73.82/- per Equity
Share.

3. Shareholding Pattern of our Company as per the last filing with the Stock Exchange, in compliance
with the provisions of the SEBI LODR Regulations:

(i) The shareholding pattern of our Company, as on June 30, 2024, may be accessed on the websites
of the BSE and CSE at https://www.bseindia.com/stock-share-price/purple-finance-
ltd/purplefin/544191/shareholding-pattern/ and https://listingcompliance.cse-
india.com/publicviewcompany/, respectively.

(ii) A statement as on June 30, 2024 showing holding of Equity Shares of persons belonging to the
category of "Promoter and Promoter Group", including details of lock-in, pledge and
encumbrance thereon, may be accessed on the website of the BSE and CSE
athttps://www.bseindia.com/corporates/shpPromoterNGroup.aspx?scripcd=544191&qtrid=12

| 45 |
 2.00&QtrName=June%202024 and https://listingcompliance.cse-
india.com/publicviewcompany/, respectively.

(iii) A statement as on June 30, 2024, showing holding of securities (including Equity Shares,
warrants, convertible securities) of persons belonging to the category "Public", including equity
shareholders holding more than 1% of the total number of Equity Shares, as well as details of
shares which remain unclaimed may be accessed on the website of BSE and CSE at
https://www.bseindia.com/corporates/shpPublicShareholder.aspx?scripcd=544191&qtrid=122
.00&QtrName=June %202024,and https://listingcompliance.cse-
india.com/publicviewcompany/, respectively.

4. Details of shares locked-in, pledged, encumbrance by Promoters and Promoter Group:

As on date of filing of this Letter of Offer, the shareholdings of our Promoters and Promoter Group,
except Saguna Mercantile Private Limited are locked-in.

For further details of our Application for the reclassification of our Promoter Group under Regulation
31A of SEBI (Listing Obligations and Disclosure Requirements), 2018, kindly refer to "Our Promoter
and Promoter Group" on page 96 of this Letter of Offer.

5. There are no outstanding options or convertible securities, including any outstanding warrants or rights
to convert debentures, loans or other instruments convertible into our Equity Shares as on the date of this
Letter of Offer.

6. Our Company shall ensure that any transaction in the Equity Shares by the Promoters and the Promoter
Group during the period between the date of filing this Letter of Offer and the date of closure of the Issue
shall be reported to the Stock Exchange within 24 hours of such transaction.

7. At any given time, there shall be only one denomination of the Equity Shares of the Company.

8. All Equity Shares are fully paid-up and there are no partly paid-up Equity Shares as on the date of this
Letter of Offer. Further, the Rights Equity Shares allotted pursuant to the Rights Issue shall be fully paid
up. For further details on the terms of the Issue, please see the section entitled "Terms of the Issue" on
page 182 of this Letter of Offer.

9. Except for the issue of any Equity Shares or options/units pursuant to ESOP Plan, there will be no further
issue of Equity Shares whether by way of a public issue, qualified institutions placement, issue of bonus
shares, preferential allotment, rights issue or in any other manner during the period commencing from
filing of this Letter of Offer with SEBI until the Equity Shares have been listed on the Stock Exchanges,
or all application monies have been refunded, as the case may be.

| 46 |
 OBJECTS OF THE ISSUE

Appraising entity

None of the objects of the Issue for which the Net Proceeds will be utilised has been appraised by any bank,
financial institution or any other external agency.

The Issue

Our Company intends to utilize the Net Proceeds from the Issue towards funding of the following objects:
1. Augmenting our capital base; and
2. General corporate purposes.

The main objects and objects incidental or ancillary to the main objects as stated in the Memorandum of
Association enable our Company to undertake (i) its existing activities; (ii) to undertake the activities proposed to
be funded from the Net Proceeds. Further, our objects as stated in the Memorandum of Association do not restrict
us from undertaking the activities for which the funds are being raised by our Company through the Issue.

The details of the Net Proceeds are summarized in the table below:

Particulars Amount (Rs. in Lakhs)

Issue Proceeds* 4,481.99
Less: Estimated Issue related expenses 308.00
Net Proceeds** 4,173.99
* Assuming full subscription in the Issue and subject to finalization of the Basis of Allotment and to be adjusted per the Rights Entitlement
ratio.

Requirement of Funds and Utilisation of Net Proceeds

The Net Proceeds are proposed to be used in accordance with the details set forth in the following table:

Particulars Estimated amount (up to) (Rs. in Lakhs)

Augmenting our capital base 3,130.49
General corporate purposes* 1,043.50
Total Net Proceeds 4,173.99
* The amount shall not exceed 25% of the Issue Proceeds.

Means of Finance

The funding requirements mentioned above are based on the internal management estimates of our Company and
have not been appraised by any bank, financial institution or any other external agency. They are based on current
circumstances of our business and our Company may have to revise its estimates from time to time on account of
various factors beyond its control, such as market conditions, competitive environment, and interest or exchange
rate fluctuations. Consequently, the funding requirements of our Company and deployment schedules are subject
to revision in the future at the discretion of our management. If additional funds are required for the purposes as
mentioned above, such requirement may be met through internal accruals, additional capital infusion, debt
arrangements or any combination of them, subject to compliance with applicable laws.

The fund requirements set out above are proposed to be entirely funded from the Net Proceeds. Accordingly, we
confirm that there are no requirements to make firm arrangements of finance under Regulation 62(1)(c) of the
SEBI ICDR Regulations through verifiable means towards 75% of the stated means of finance, excluding the
amount to be raised from the Issue.

Proposed Schedule of Implementation or Deployment of Net Proceeds

The following table provides the schedule of utilisation of the Net Proceeds:

| 47 |
 (₹ in lakhs)
Particulars Amount to be funded from the Proposed Schedule for
Net Proceeds (up to) deployment of the Net Proceeds
Financial Year 2024-25

Augmenting our capital base 3,130.49 3,130.49

General corporate purposes* 1,043.50 1,043.50
Total Net Proceeds 4,173.99 4,173.99
* The amount shall not exceed 25% of the Issue Proceeds.

In the event that the Net Proceeds are not completely utilized for the purposes stated above and as per the estimated
schedule of utilisation specified above, the same would be utilized in subsequent Financial Years for achieving
the objects of the Issue.

Details of the activities to be financed from the Net Proceeds

The details in relation to objects of the Issue are set forth herein below.

I. Augmenting our capital base

We are a Non-Banking Finance Company in India and are registered with the RBI. Our portfolio of
products primarily consists of Mortgage loans, which include loans against property. For further details,
see “Our Business” beginning on page 76 of this Letter of Offer.

As per the RBI Master Directions, we are required to maintain a minimum capital to risk ratio, consisting
of Tier I and Tier II capital of not less than 15% of our aggregate risk weighted assets and risk adjusted
value of off-balance sheet items, with Tier I capital not being below 10% at any point of time. Further,
we are required to ensure that the total of Tier II capital at any point of time, should not exceed 100% of
Tier I capital. As of March 31, 2024, our Company’s CRAR – Tier I capital stood at 48.65%.

We intend to utilise upto ₹ 3130.49 lakhs from the Net Proceeds towards augmenting our capital base to
meet our future funding requirements for our business activities, including towards onward lending,
strengthening our balance sheet and to ensure compliance with the requirements prescribed under the
RBI Master Directions. This is expected to arise out of growth of our business and assets.

II. General corporate purposes

Our Company intends to deploy the balance Net Proceeds aggregating up to ₹1043.50 lakhs towards
general corporate purposes, provided that the amount to be utilized for general corporate purposes shall
not exceed 25% of the Issue Proceeds. Such utilisation towards general corporate purposes shall be to
drive our business growth, including, amongst other things, meeting any expenses incurred in the
ordinary course of business by our Company, including salaries and wages, rent, administration
expenses, upgradation of information technology infrastructure, insurance related expenses, and the
payment of taxes and duties, repair, maintenance, renovation and upgradation of our offices or branches,
strategic initiatives, leasehold improvements, meeting of exigencies which our Company may face in the
course of any business and any other purpose as permitted by applicable laws and as approved by our
Board or a duly appointed committee thereof, subject to meeting regulatory requirements and obtaining
necessary approvals / consents, as applicable.

Our management will have flexibility in utilizing the proceeds earmarked for general corporate purposes.

Estimated Issue Related Expenses

The estimated Issue related expenses are as follows:

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 (unless otherwise specified, in ₹ in Lakhs)
S.No Particulars Estimated Percentage of total estimated Percentage of
Amount Issue expenditure (%) Issue Size (%)
1 Lead Manager 20.00 6.49 0.44
2 Fees payable to the Registrar to the 3.00 0.97 0.07
Issue
3 Advertising, marketing and 250.00 81.17 5.56
shareholder outreach expenses
4 Fees payable to regulators, 15.00 4.87 0.33
including Stock Exchanges, SEBI,
depositories and other statutory fee
5 Fees payable to others#
Others
Printing and stationery 2.00 0.65 0.04
Fees payable to the legal counsels 8.00 2.60 0.18
Miscellaneous expenses 10.00 3.25 0.22
Total estimated Issue related expenses* 308.00 100.00 6.84
#Includes fees payable to the Statutory Auditors,
*Includes applicable taxes. Subject to finalisation of Basis of Allotment. In case of any difference between the estimated Issue related expenses
and actual expenses incurred, the shortfall or excess shall be adjusted with the amount allocated towards general corporate purposes.

Deployment of funds

Our Company has deployed a sum of ₹ 12.31 lakhs towards the objects of the issue mentioned above (certified by
M/s Jogin Raval & Associates, Chartered Accountants vide their letter dated September 17, 2024). The details of
the deployment are as under:

Particulars ₹ in lakhs
Issue Expenses 12.31
Source of Funds
Internal Accruals 12.31
*The said amount has been met by the Company from its own resources and we have been informed that the same will be adjusted against
the issue proceeds

Bridge Financing Facilities

Our Company has not availed any bridge loans from any banks or financial institutions as on the date of this Letter
of Offer, which are proposed to be repaid from the Net Proceeds.

Interim Use of Net Proceeds

Our Company shall deposit the Net Proceeds, pending utilisation of the Net Proceeds for the purposes described
above, by depositing the same with scheduled commercial banks included in second schedule of Reserve Bank of
India Act, 1934
.
Strategic or Financial Partners

There are no strategic or financial partners to the Objects of the Issue.

Other confirmations

No part of the proceeds of the Issue will be paid by our Company to our Promoter, our Promoter Group, our
Directors or our Key Managerial Personnel, except in the normal course of its business.

Our Promoter, our Promoter Group and our Directors do not have any interest in the objects of the Issue, and there
are no material existing or anticipated transactions in relation to utilization of the Net Proceeds with our Promoter,
Promoter Group, Directors or Key Managerial Personnel.

| 49 |
 STATEMENT OF POSSIBLE SPECIAL TAX BENEFITS

Statement of special tax benefits available to the company, its material subsidiary and its shareholders under the
applicable laws in India.

To
The Board of Directors
Purple Finance Limited,
Room No. 11, 1st Floor,
Indu Chamber 349/353,
Samuel Street, Vadgadi,
Masjid Bunder (W),
Mumbai – 400 003

Dear Sirs,

Sub: Statement of possible special tax benefits (“the Statement”) available to Purple Finance Limited
(“the Company”), its shareholders under the Direct & Indirect tax laws i.e. Income Tax Act, 1961 &
The Central Goods and Services Tax Act, 2017, The Integrated Goods and Services Tax Act, 2017
and the applicable States’ Goods and Services Tax Acts.

Re: Proposed Right Issue of equity shares of Purple Finance Limited on the record date

We have been requested by the Company to issue a statement on the special tax benefits available to the Company,
and its shareholders attached for inclusion in the Draft Letter of Offer/ Letter of Offer (DLOF/ LOF) to be filed
with the Exchange authorities under LODR Regulations ((DLOF/LOF)) in connection with the right issue of
equity shares on the record (the “Issue”). The Statement has been prepared by the management of the Company
and signed by us for identification purpose only.

The statement showing the current position of special tax benefits available to the Company, and the Shareholders
of the Company as per the provisions of Income tax Act, 1961(“the IT Act”) read with rules, circulars, and
notifications i.e. applicable for the assessment year AY 2025-26 relevant to the financial year 2024-25, and The
Central Goods and Services Tax Act, 2017, The Integrated Goods and Services Tax Act, 2017 and the applicable
States’ Goods and Services Tax Acts, read with rules, circulars, and notifications relevant to the financial year
2024-25 for inclusion in the DLOF/LOF in connection with the proposed right issue is annexed herewith

These possible special tax benefits are dependent on the Company and the Shareholders of the Company fulfilling
the conditions prescribed under the relevant provisions of the corresponding Tax laws. Hence, the ability of the
Company and the shareholders of the Company to derive these possible special tax benefits is dependent upon
their fulfilling such conditions, which is based on business imperatives, the Company or its shareholders may face
in the future and accordingly, the Company and the shareholders of the Company may or may not choose to fulfil.
Further, certain tax benefits may be optional, and it would be at the discretion of the Company or the shareholders
of the Company to exercise the option by fulfilling the conditions prescribed under the Tax laws.

The benefits discussed in the enclosed statement are neither exhaustive nor conclusive. The contents stated in the
Annexure are based on the information and explanations obtained from the Company. This statement is only
intended to provide general information to guide the investors and is neither deigned nor intended to be a substitute
for professional tax advice. In view of the individual nature of the tax consequences and the changing tax laws,
each investor is advised to consult their own tax consultant with respect to the specific tax implications arising
from the right issue.

We do not express any opinion or provide any assurance whether:

1. The Company or the shareholders of the Company will continue to obtain these benefits in future;
2. The conditions prescribed for availing the benefits have been/would be met;
3. The revenue authorities/courts will concur with the views expressed herein

The statement is intended solely for information and the inclusion in the DLOF/LOF to be issued in connection
with the Right Issue of Equity Shares and is not be used, referred to or distributed for any other purpose, without

| 50 |
our prior consent, provided the below statement of limitation is included in the DLOF/LOF.

Limitation:

Our views expressed herein are based on the facts and assumptions indicated to us. No assurance is given that the
revenue authorities/ courts will concur with the views expressed herein. Our views are based on the existing
provisions of the Tax Laws and its interpretation, which are subject to change from time to time. We do not assume
responsibility to update the views consequent to such changes. We will not be liable to the Company and any
other person in respect of this Statement, except as per applicable law.

For M/s Jogin Raval & Associates

Chartered Accountants
ICAI’s Firm Registration No: 128586W

CA Jogin K. Raval
M. No. 122197
Mumbai,
August 21, 2024
UDIN: 24122197BKAORE2782

Statement of Possible Special Direct Tax Benefits available to Purple Finance Limited (The “Company”)
And Its Shareholders under the applicable Direct Tax Laws in India

The information provided below only sets out the possible special direct tax benefits available to the Company
and its shareholders in a summary manner only and is not a complete analysis or listing of all potential tax
consequences of the subscription, ownership and disposal of equity shares, under the current tax laws presently
in force in India. Several of these benefits are dependent on the Company and its shareholders fulfilling the
conditions prescribed under the relevant tax laws. Hence, the ability of the Company and the shareholders of the
Company to derive the direct tax benefits is dependent upon their fulfilling such conditions, which is based on
business imperatives the Company may face in the future and accordingly, the Company and the shareholders of
the Company may or may not choose to fulfil. Further, certain tax benefits may be optional, and it would be at the
discretion of the Company or the shareholders of the Company to exercise the option by fulfilling the conditions
prescribed under the Tax laws.

The following overview is not exhaustive or comprehensive and is not intended to be a substitute for professional
advice. Investors are advised to consult their own tax consultant with respect to the tax implications of an
investment in the shares. The tax benefits stated below are as per the Income tax Act, 1961 (“IT Act”) as amended
from time to time and applicable for financial year 2024-25 relevant to assessment year 2025-26

I. Under the Income Tax Act, 1961

1. Special tax benefits available “to the Company” under the Act

A. Lower corporate tax rate under Section 115BAA

A new Section 115BAA has been inserted by the Taxation Laws (Amendment) Act, 2019

(“the Amendment Act, 2019”) granting an option to domestic companies to compute corporate tax at a
reduced rate of 25.17% (22% plus surcharge of 10% and cess of 4%) from the Financial year 2019-20,
provided such companies do not avail specified exemptions/incentives (Deduction under Section 10AA,
32(1)(iia), 33AB, 33ABA, 35(1)(ii)/(iia)/(iii), 35(2AA), 35(2AB), 35AD, 35CCC, 35CCD, 80C to 80U).
The Amendment Act, 2019 also provides that domestic companies availing such option will not be
required to pay Minimum Alternate Tax (“MAT”) under Section 115JB. The CBDT has further issued
Circular 29/2019 dated October 02, 2019 clarifying that since the MAT provisions under Section 115JB
itself would not apply where a domestic company exercises option of lower tax rate under Section
115BAA, MAT credit would not be available. Corresponding amendment has been inserted under Section
115JAA dealing with MAT credit. The Company has already exercised the above option u/s 115BAA of
the IT Act, 1961.

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B. Provision For bad and doubtful debts in cases of specified banks/FIs/NBFCs u/s 36(1)(viia)(d)

In case of a non-banking financial company, provision for bad and doubtful debts is deductible to the
extent not exceeding five per cent of the total income (computed before making any deduction under this
clause and Chapter VI-A).

C. In terms of section 43D of the Act, and subject to the conditions specified therein interest income of a
bank and certain other specified financial institutions on certain categories of bad and doubtful debts as
specified in Rule 6EA of the Income-tax Rules, 1962, shall be chargeable to tax only on the year of
receipt or credit to Profit and Loss Account, whichever is earlier.

D. Deductions from Gross Total Income:

• Section 80M - Deduction in respect of inter-corporate dividends

A new Section 80M has been inserted by the Finance Act, 2020 w.e.f. April 1, 2020 providing for
deduction from gross total income of a domestic company, of an amount equal to dividends received
by such company from another domestic company or a foreign company or a business trust as does
not exceed the amount of dividend distributed by it on or before one month prior to the date of filing
its tax return as prescribed under Section 139(1) of the Act. Where the Company receives any such
dividend during a Financial Year and also, distributes dividend to its shareholders before the
aforesaid date, as may be relevant to the said Financial Year, it shall be entitled to the deduction
under Section 80M of the Act.

• Deduction under section 80JJAA of the Act

As per the provisions of Section 80JJAA of the Act, where the gross total income of an assessee, to
whom provisions of section 44AB of the Act applies, includes any profit and gains derived from
business, then such assessee shall be entitled to claim a deduction of an amount equal to thirty
percent of additional employee cost incurred in the course of such business in the previous year, for
three assessment years including the assessment year relevant to the previous year in which such
employment is provided. The eligibility to claim the deduction is subject to fulfilment of prescribed
conditions specified in sub-section (2) of section 80JJAA of the Act.

2. Special tax benefits available to “Shareholders”

A. There are no special tax benefits available to the shareholders (other than resident corporate shareholder)
of the Company under section 80M of the IT Act, 1961

With respect to a resident corporate shareholder, a new section 80M is inserted in the Finance Act, 2020,
to remove the cascading effect of taxes on inter-corporate dividends during financial year 2020-21 and
thereafter. The section provides that where the gross total income of a domestic company in any previous
year includes any income by way of dividends from any other domestic company or a foreign company
or a business trust, there shall, in accordance with and subject to the provisions of this section, be allowed
in computing the total income of such domestic company, a deduction of an amount equal to so much of
the amount of income by way of dividends received from such other domestic company or foreign
company or business trust as does not exceed the amount of dividend distributed by it on or before the
due date. The “due date” means the date one month prior to the date for furnishing the return of income
under sub-section (1) of section 139.

B. As per section 112A of the IT Act, Long Term Capital Gains (‘LTCG’) arising from the transfer of equity
shares on which Securities Transaction Tax (‘STT’) is paid at the time of acquisition and sale, shall be
taxed at the rate of 10% (without indexation) (plus applicable surcharge and cess) of such capital gains.
This is subject to fulfilment of prescribed additional conditions as per Notification No. 60/2018/F.No
370142/9/2017 dated 1 October 2018. It is to be noted that tax u/s 112A of the IT Act shall only be levied
where such aggregate capital gains exceed INR 1,00,000/- in a year.

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C. As per section 111A of the IT Act, Short-Term Capital Gains (‘STCG’) arising from the transfer of equity
shares on which STT has been paid at the time of sale shall be taxed at the rate of 15% (plus applicable
surcharge and cess)

D. Special Provisions for Non-resident shareholders

As per section 90(2) of the IT Act, non-resident shareholders will be entitled to be governed by the
beneficial provisions under the respective Double Taxation Avoidance Agreement (‘DTAA”), if any,
applicable to such non-residents. This is subject to fulfilment of conditions prescribed to avail treaty
benefits.

Further, any income by way of capital gains accruing to non-residents, may be subject to withholding tax
as per the provisions of the IT Act or under the relevant DTAA, whichever is beneficial. However, where
such non-resident has obtained a lower withholding tax certificate from the tax authorities, the
withholding tax rate would be as per the said certificate. The non-resident shareholders may be able to
avail credit for any taxes paid by them in India, subject to local laws of the country in which such
shareholder is resident.

E. There are no other possible special tax benefits available to the Shareholders of the Company for
investing in the shares of the Company.

Notes:
• The above statement of possible special tax benefits sets out the provisions of Tax Laws in a summary
manner only and is not a complete analysis or listing of all potential tax consequences of the purchase,
ownership and disposal of shares
• The above statement covers only certain special tax benefits under the Act, read with the relevant rules,
circulars and notifications and does not cover any benefit under any other law in force in India. This
statement also does not discuss any tax consequences, in the country outside India, of an investment in
the shares of an Indian company.
• The above statement of possible special tax benefits is as per the current Direct tax laws relevant for the
assessment year 2025-26 & Indirect Tax laws. Several of these benefits are dependent on the Company
or its shareholders fulfilling the conditions prescribed under the relevant provisions of the Tax Laws.
• In respect of non-residents, the tax rates and consequent taxation mentioned above will be further subject
to any benefits available under the relevant Double Taxation Avoidance Agreement, if any, entered into
between India and the country in which the non-resident has fiscal domicile.
• In respect of lower Corporate Tax rate under section 115BAA, it may be noted that such option is already
exercised by the Company in the earlier assessment years
• If the company opts for concessional corporate income tax rate as prescribed under section 115BAA of
the Act, it will not be allowed to claim any of the following deductions:
➢ Deduction under the provisions of section 10AA (deduction for units in Special Economic Zone)
➢ Deduction under clause (iia) of sub-section (1) of section 32 (Additional depreciation)
➢ Deduction under section 32AD or section 33AB or section 33ABA (Investment allowance in
backward areas, Investment deposit account, site restoration fund)
➢ Deduction under sub-clause (ii) or sub-clause (iia) or sub-clause (iii) of sub-section (1) or
subsection (2AA) or sub-section (2AB) of section 35 (Expenditure on scientific research)
➢ Deduction under section 35AD or section 35CCC (Deduction for specified business,
agricultural extension project)
➢ Deduction under section 35CCD (Expenditure on skill development)
➢ Deduction under any provisions of Chapter VI-A other than the provisions of section 80JJAA
or section 80M;
➢ No set off of any loss carried forward or depreciation from any earlier assessment year, if such
loss or depreciation is attributable to any of the deductions referred above
➢ No set off of any loss or allowance for unabsorbed depreciation deemed so under section 72A,
if such loss or depreciation is attributable to any of the deductions referred above

| 53 |
Statement of Possible Special Indirect Tax Benefits available to Purple Finance Limited (The “Company”)
and its Shareholders under the applicable Indirect Tax Laws in India

I. Under the CGST Act, 2017

Neither the Company nor the shareholders are entitled to any special tax benefits under the Indian Indirect
Tax Regulations, read with respective rules, circulars and notifications made thereunder.

Section 17 of the CGST Act, 2017

Apportionment of credit and blocked credits Since the Company is an NBFC, therefore the Company
has adopted the option to reverse 50% of the eligible ITC. Section 17(4) of the CGST Act, 2017.
Accordingly, Rates & taxes head comprised of expense on account of GST reversed by the Company

Treatment of any other possible Special Tax Benefits available to the Company and to its Shareholders
under Income Tax Act, 1961 (Act), The Central Goods and Services Tax Act, 2017, The Integrated Goods
and Services Tax Act, 2017 and the applicable States’ Goods And Services Tax Acts.

Sr. No. Particulars Direct Tax Indirect Tax

I Special tax benefits available to the Nil Nil
Company
II Special tax benefits available to the Nil Nil
Shareholders

| 54 |
 SECTION IV – ABOUT THE COMPANY

INDUSTRY OVERVIEW

1) MACRO ECONOMIC OVERVIEW

(a) Global Economy

Global growth is projected at 3.1 percent in 2024 and 3.2 percent in 2025, with the 2024 forecast 0.2
percentage point higher than that in the October 2023 World Economic Outlook (WEO) on account of greater-
than-expected resilience in the United States and several large emerging market and developing economies,
as well as fiscal support in China. The forecast for 2024–25 is, however, below the historical (2000–19)
average of 3.8 percent, with elevated central bank policy rates to fight inflation, a withdrawal of fiscal support
amid high debt weighing on economic activity, and low underlying productivity growth. Inflation is falling
faster than expected in most regions, in the midst of unwinding supply-side issues and restrictive monetary
policy. Global headline inflation is expected to fall to 5.8 percent in 2024 and to 4.4 percent in 2025, with the
2025 forecast revised down.

With disinflation and steady growth, the likelihood of a hard landing has receded, and risks to global growth
are broadly balanced. On the upside, faster disinflation could lead to further easing of financial conditions.
Looser fiscal policy than necessary could imply temporarily higher growth, but at the risk of a more costly
adjustment later on. Stronger structural reform momentum could bolster productivity with positive cross-
border spillovers. On the downside, new commodity price spikes from geopolitical shocks––including
continued attacks in the Red Sea––and supply disruptions or more persistent underlying inflation could
prolong tight monetary conditions. Deepening property sector woes in China or, elsewhere, a disruptive turn
to tax hikes and spending cuts could also cause growth disappointments.

Policymakers’ near-term challenge is to successfully manage the final descent of inflation to target,
calibrating monetary policy in response to underlying inflation dynamics and—where wage and price
pressures are clearly dissipating—adjusting to a less restrictive stance. At the same time, in many cases,
with inflation declining and economies better able to absorb effects of fiscal tightening, a renewed focus
on fiscal consolidation to rebuild budgetary capacity to deal with future shocks, raise revenue for new
spending priorities, and curb the rise of public debt is needed. Targeted and carefully sequenced structural
reforms would reinforce productivity growth and debt sustainability and accelerate convergence toward
higher income levels. More efficient multilateral coordination is needed for, among other things, debt
resolution, to avoid debt distress and create space for necessary investments, as well as to mitigate the
effects of climate change.

On the global front, the US Federal Reserve (Fed) held policy rates steady in its September meeting, after
a 25 basis points hike in July but remains on the edge as the economy continues to witness tight labour
market conditions. S&P sees the policy rates remaining higher for longer and does not expect the first
rate cut till June 2024. According to flash estimates released by Eurostat, inflation in the eurozone eased
to 4.3% from 5.2% in August with prices easing in several major categories. Inflation moderated in food
(6.6% vs 7.8%), non-energy industrial goods (4.2% vs. 4.7%) and services (4.7% vs. 5.5%). Prices of
energy fell at a faster pace on-year in September compared with the previous month (-4.7% vs. -3.3%).
Core inflation, excluding energy, food, alcohol, and tobacco, eased sharply to 4.5% compared with 5.3%.

While the risk of tight and volatile global financial conditions persists, India’s vulnerability to these
external shocks likely to be lower in Fiscal 2024-current account deficit -will likely be pared this Fiscal
on the back of lower crude oil prices. This, coupled with the RBI s adequate forex reserves and the
country’s good growth prospects, should cushion the impact of a global spill over on Indian
macroeconomic conditions. IMF has projected Indian economy to grow at 6.8% in FY 2024-2025
Source: International Monetary Fund Forecast https://www.imf.org/en/Publications/WEO; Last Updated on 16th July 2024

(b) Indian Economy

Global economic activity is rebalancing and is expected to grow at a stable pace in 2024. Inflation has
been moderating unevenly, with services inflation staying elevated and slowing progress towards targets.

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 Uncertainty on the pace and timing of policy pivots by central banks is keeping financial markets volatile.
Equity markets have touched new highs in both advanced and emerging market economies. Non-energy
commodity prices have firmed up, while the US dollar and bond yields are exhibiting two-way movement
with spillovers to emerging market currencies. Gold prices have surged to record highs on safe haven
demand.

According to the provisional estimates released by the National Statistical Office (NSO) on May 31,
2024, real gross domestic product (GDP) growth in Q4:2023-24 stood at 7.8 per cent as against 8.6 per
cent in Q3. Real GDP growth for 2023-24 was placed at 8.2 per cent. On the supply side, real gross value
added (GVA) rose by 6.3 per cent in Q4:2023-24. Real GVA recorded a growth of 7.2 per cent in 2023-
24.

Going forward, high frequency indicators of domestic activity are showing resilience in 2024-25. The
south-west monsoon is expected to be above normal, which augurs well for agriculture and rural demand.
Coupled with sustained momentum in manufacturing and services activity, this should enable a revival
in private consumption. Investment activity is likely to remain on track, with high-capacity utilisation,
healthy balance sheets of banks and corporates, Government’s continued thrust on infrastructure
spending, and optimism in business sentiments. Improving world trade prospects could support external
demand. Headwinds from geopolitical tensions, volatility in international commodity prices, and
geoeconomic fragmentation, however, pose risks to the outlook. Taking all these factors into
consideration, real GDP growth for 2024-25 is projected at 7.2 per cent with Q1 at 7.3 per cent; Q2 at
7.2 per cent; Q3 at 7.3 per cent; and Q4 at 7.2 per cent (Chart 1). The risks are evenly balanced.

Headline inflation has seen sequential moderation since February 2024, albeit in a narrow range from
5.1 per cent in February to 4.8 per cent in April 2024. Food inflation, however, remains elevated due to
persistence of inflation pressures in vegetables, pulses, cereals, and spices. Deflation in fuel prices
deepened during March-April, reflecting the cut in liquified petroleum gas (LPG) prices. Core (CPI
excluding food and fuel) inflation eased further to 3.2 per cent in April, the lowest in the current CPI
series, with core services inflation also falling to historic lows.

Looking ahead, overlapping shocks engendered by rising incidence of adverse climate events impart
considerable uncertainty to the food inflation trajectory. Market arrivals of key rabi crops, particularly
pulses and vegetables, need to be closely monitored in view of the recent sharp upturn in prices. Normal
monsoon, however, could lead to softening of food inflation pressures over the course of the year.
Pressure from input costs have started to edge up and early results from enterprises surveyed by the
Reserve Bank expect selling prices to remain firm. Volatility in crude oil prices and financial markets
along with firming up of non-energy commodity prices pose upside risks to inflation. Taking into account
these factors, CPI inflation for 2024-25 is projected at 4.5 per cent with Q1 at 4.9 per cent; Q2 at 3.8 per
cent; Q3 at 4.6 per cent; and Q4 at 4.5 per cent (Chart 2). The risks are evenly balanced.
Source: RBI Monetary Policy Statement https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=58136; Dated 21st
June 2024

(c) Indian Economy Outlook

India to witness GDP growth of 6.0 per cent to 6.8 per cent in 2023-24, depending on the trajectory of
economic and political developments globally.

India’s recovery from the pandemic was relatively quick, and growth in the upcoming year will be
supported by solid domestic demand and a pickup in capital investment. Aided by healthy financials,
incipient signs of a new private sector capital formation cycle are visible and more importantly,
compensating for the private sector’s caution in capital expenditure, the government raised capital
expenditure substantially. Budgeted capital expenditure rose 2.7 times in the last seven years, from FY16
to FY23, reinvigorating the Capex cycle. Structural reforms such as the introduction of the Goods and
Services Tax and the Insolvency and Bankruptcy Code enhanced the efficiency and transparency of the
economy and ensured financial discipline and better compliance. Global growth is forecasted to slow
from 3.2 per cent in 2022 to 2.7 per cent in 2023 as per IMF’s World Economic Outlook, October 2022.
A slower growth in economic output coupled with increased uncertainty will dampen trade growth. This

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is seen in the lower forecast for growth in global trade by the World Trade Organisation, from 3.5 per
cent in 2022 to 1.0 per cent in 2023. On the external front, risks to the current account balance stem from
multiple sources. While commodity prices have retreated from record highs, they are still above pre-
conflict levels. Strong domestic demand amidst high commodity prices will raise India’s total import bill
and contribute to unfavourable developments in the current account balance. These may be exacerbated
by plateauing export growth on account of slackening global demand. Should the current account deficit
widen further, the currency may come under depreciation pressure. Entrenched inflation may prolong
the tightening cycle, and therefore, borrowing costs may stay ‘higher for longer’. In such a scenario,
global economy may be characterised by low growth in FY24. However, the scenario of subdued global
growth presents two silver linings – oil prices will stay low, and India’s CAD will be better than currently
projected. The overall external situation will remain manageable.

The growth story is inclusive when it creates jobs. The employment levels have risen in the current
financial year, as the Periodic Labour Force Survey (PLFS) shows that the urban unemployment rate for
people aged 15 years and above declined from 9.8 per cent in the quarter ending September 2021 to 7.2
per cent one year later (quarter ending September 2022). This is accompanied by an improvement in the
labour force participation rate (LFPR) as well, confirming the emergence of the economy out of the
pandemic-induced slowdown early in FY23.

In FY21, the Government announced the Emergency Credit Line Guarantee Scheme, which succeeded
in shielding micro, small and medium enterprises from financial distress. A recent CIBIL report (ECLGS
Insights, August 2022) showed that the scheme has supported MSMEs in facing the COVID shock, with
83 per cent of the borrowers that availed of the ECLGS being micro-enterprises. Among these micro
units, more than half had an overall exposure of less than Rs10 lakh. Furthermore, the CIBIL data also
shows that ECLGS borrowers had lower non-performing asset rates than enterprises that were eligible
for ECLGS but did not avail of it.

Further, the GST paid by MSMEs after declining in FY21 has been rising since and now has crossed the
pre-pandemic level of FY20, reflecting the financial resilience of small businesses and the effectiveness
of the pre-emptive government intervention targeted towards MSMEs. Moreover, the scheme
implemented by the government under the Mahatma Gandhi National Rural Employment Guarantee Act
(MGNREGA) has been rapidly creating more assets in respect of “Works on individual’s land” than in
any other category. In addition, schemes like PM-KISAN, which benefits households covering half the
rural population, and PM Garib Kalyan Anna Yojana have significantly contributed to lessening
impoverishment in the country. The UNDP Report of July 2022 stated that the recent inflationary episode
in India would have a low poverty impact due to well-targeted support. In addition, the National Family
Health Survey (NFHS) in India shows improved rural welfare indicators from FY16 to FY20, covering
aspects like gender, fertility rate, household amenities, and women empowerment. So far, India has
reinforced the country’s belief in its economic resilience as it has withstood the challenge of mitigating
external imbalances caused by the Russian-Ukraine conflict without losing growth momentum in the
process. India’s stock markets had a positive return in CY22, unfazed by withdrawals by foreign portfolio
investors. India’s inflation rate did not creep too far above its tolerance range compared to several
advanced nations and regions. India is the third-largest economy in the world in PPP terms and the fifth-
largest in market exchange rates. As expected of a nation of this size, the Indian economy in FY23 has
nearly “recouped” what was lost, “renewed” what had paused, and “re-energised” what had slowed
during the pandemic and since the conflict in Europe.

The global economy battles through a unique set of challenges. There are six distinct challenges faced
by the Global Economy. The three challenges like COVID-19 related disruptions in economies, Russian-
Ukraine conflict, and its adverse impact along with disruption in supply chain, mainly of food, fuel and
fertilizer and the Central Banks across economies led by Federal Reserve responding with synchronised
policy rate hikes to curb inflation, leading to appreciation of US Dollar and the widening of the Current
Account Deficits (CAD) in net importing economies. The fourth challenge emerged as faced with the
prospects of global stagflation, nations, feeling compelled to protect their respective economic space,
thus slowing cross-border trade affecting overall growth. It adds that all along, the fifth challenge was
festering as China experienced a considerable slowdown induced by its policies. The sixth medium-term
challenge to growth was seen in the scarring from the pandemic brought in by the loss of education and
income-earning opportunities.

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 Like the rest of the world, India, too, faced this extraordinary set of challenges but withstood them better
than most economies. In the last eleven months, the world economy has faced almost as many disruptions
as caused by the pandemic in two years. The conflict caused the prices of critical commodities such as
crude oil, natural gas, fertilisers, and wheat to soar. This strengthened the inflationary pressures that the
global economic recovery had triggered, backed by massive fiscal stimuli and ultra-accommodative
monetary policies undertaken to limit the output contraction in 2020. Inflation in Advanced Economies
(AEs), which accounted for most of the global fiscal expansion and monetary easing, breached historical
highs. Rising commodity prices also led to higher inflation in the Emerging Market Economies (EMEs),
which otherwise were in the lower inflation zone by virtue of their governments undertaking a calibrated
fiscal stimulus to address output contraction in 2020. It is also seen that Inflation and monetary tightening
led to a hardening of bond yields across economies and resulted in an outflow of equity capital from most
of the economies around the world into the traditionally safe-haven market of the US. The capital flight
subsequently led to the strengthening of the US Dollar against other currencies, the US Dollar index
strengthened by 16.1 per cent between January and September 2022. The consequent depreciation of
other currencies has been widening the CAD and increasing inflationary pressures in the net importing
economies.

The Indian economy is well placed to grow faster in the coming decade once the global shocks of the
pandemic and the spike in commodity prices in 2022 faded away. With improved and healthier balance
sheets of the banking, non-banking and corporate sectors, a fresh credit cycle has already begun, evident
from the double-digit growth in bank credit over the past months. Indian economy has also started
benefiting from the efficiency gains resulting from greater formalisation, higher financial inclusion, and
economic opportunities created by digital technology-based economic reforms. Hence the outlook of
Indian economy is much better than many developing nations.

Source: Economic Survey 2022-23, Government of India;

file:///C:/Users/Sabyasachi%20Rath/Downloads/Economic%20Survey%20Complete%20PDF.pdf; July 2024 released

2) NBFC SECTOR OVERVIEW

a) Evolution in NBFC categorisation

NBFCs have emerged as the crucial source of finance for a large segment of the population, including
SMEs and economically unserved and underserved people. They have managed to cater to the diverse
needs of the borrowers in the fastest and most efficient manner, considering their vast geographical scope,
understanding of the various financial requirements of the people and extremely fast turnaround times.
Non-bank money lenders have played an important role in the financial inclusion process by supporting
the growth of millions of MSMEs and independently employing people. The sector has grown
significantly, with a number of players with heterogeneous business models starting operations. The last
few years have seen a transformation in the Indian financial services landscape. The increasing
penetration of neo-banking, digital authentication, rise of UPI and mobile phone usage as well as mobile
internet has resulted in the modularisation of financial services, particularly credit.

As of 30 September 2023, there were a total of 93561 NBFCs registered with the Reserve Bank of India
(RBI). Based on liability structure, NBFCs have been traditionally categorised into deposit-taking
NBFCs (NBFCs-D), which are allowed to raise term deposits and non-deposit-taking NBFCs (NBFCs-
ND). In October 2021, the RBI introduced a scale-based regulation for NBFCs to align its regulatory
framework and further classify these financial institutions based on their evolving risk profile,
considering the evolution of NBFCs with regard to size, complexity and interconnection within the
financial sector. This framework categorises:
a. NBFCs in the base layer (NBFC-BL) with assets less than INR 1,000 crore
b. Middle layer (NBFC-ML) with assets more than INR 1,000 crore
c. Upper layer (NBFC-UL) and top layer (NBFC-TL) which are specifically identified by the RBI
based on a set of parameters and scoring methodology A list of 16 NBFCs-UL, identified as per
the methodology specified in scale-based regulation for NBFCs, was released on 30 September
2022

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 Scale Based Approach Proposed for NBFCs

Source: RBI, CRISIL MI&A

Regulatory distinction between banks and NBFCs

NBFC ND SI NBFC D Banks (Base l-III)

Minimum net owned funds 20 million 20 million N.A.
Capital adequacy 15.0% 15.0% 11.5%

Tier I capital 10.0% 10.0% 9.5%

Stage III assets 90 days# 90 days# 90 days
Cash reserve ratio (CRR) N.A. N.A. 3.0%

Statutory liquidity N.A. 15.0% 18.00%

ratio (SLR)
Priority sector N.A. N.A. 40% of advances
SARFAESI eligibility Yes* Yes* Yes
Exposure norms (% of NOF) Single borrower: 15% Single borrower: Single borrower: 15%
(+10% for IFC) 15% (+5% for infrastructure
projects)
Group of borrowers: Group of Group of borrowers:
25% (+15% for IFC) borrowers: 25% 30% (+10% for
infrastructure projects)
Note: NA - Not applicable
*The Ministry of Finance, in its union budget for 2021, proposed that the SARFAESI threshold be reduced from Rs. 5 million to
Rs. 2 million.
# Discretion with the audit committee of NBFCs to defer stage 3 classification beyond 90+dpd
Source: CRISIL MI&A

The RBI has taken a balanced view, and instead of going for a one-size-fits-all approach, it has opted for differential regulations
based on the size and systemic importance of an NBFC. Furthermore, the importance of NBFCs in providing credit to underserved
customers has been recognized. The RBI has not proposed imposition of CRR and SLR on NBFCs, which would come as a relief
to NBFCs.

b) Growth of NBFCs

As per CRISIL projection NBFC credit to grow at 12%-14% between Fiscal 2023 and Fiscal 2025. The
credit growth will be driven by the retail vertical, including housing, auto, MSME and microfinance
segments. Rapid revival in the economy is expected to drive consumer demand in Fiscal 2024, leading
to healthy growth for NBFCs. Moreover, organic consolidation is underway with larger NBFCs gaining

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 share with some of the merger and acquisition in the NBFC space.

NBFC credit to grow at CAGR 12-14% between Fiscals 2023 and 2025

The NBFC sector has, over the years, evolved considerably in terms of size, operations, technological
sophistication, and entry into newer areas of financial services and products. The number of NBFCs as
well as the size of the sector have grown significantly, with several players with heterogeneous business
models starting operations.

After a moderation in growth post pandemic, NBFCs are back on track with an estimated credit growth
of 12- 13% during Fiscal 2023. Going ahead it is expected the growth trend to continue with credit growth
at 13-14% during Fiscal 2024. The industry will continue to witness the emergence of newer NBFCs
catering to specific customer segments. The COVID-19 pandemic and consequent acceleration in both
adoption of technology and change in consumer habits as well as increasing availability of data for credit
decision-making has made it possible to build an NBFC lending business without investing large sums
to have brick-and-mortar presence on the ground. Overall, between Fiscal 2023 to Fiscal 2025, it is
forecasted that overall NBFC credit to grow at a CAGR of 12%-14%. Further, retail credit given out by
NBFCs is forecast to grow at a pace of 13%-15% CAGR over the same time.

c) Rising Middle India population to help sustain growth

Proportion of Middle India (defined as annual household income between Rs 0.2 Mn to Rs 1 Mn) is on
a rise over the last decade and is expected to grow further with continuous increase in GDP and household
incomes. It is estimated that there were 41 million households in India in this category as at the end of
Fiscal 2012, and by the end of Fiscal 2030, it is projected this figure will increase to 181 million
households translating into a compound annual growth rate (CAGR) of 9% over this time period. This
growth in the number of middle-income households is expected to lead to enhanced opportunities for
retail and MSME financiers as well as consumer goods marketers. A large number of these households,
which have entered the middle-income bracket in the last few years, are likely to be from semi-urban and
rural areas. The rise in incomes in these areas is also evident when one observes the trend in share of
deposits coming into banks.

It is estimated that the improvement in the literacy levels, increasing access to information and awareness,
increases in the availability of necessities, such as electricity, cooking gas, and toilets, and the
improvement in road infrastructure has led to an increase in aspirations of Middle India, which is likely
to translate into increased opportunities for financial service providers. In fact, some of these trends are
already visible. Smart phone ownership, internet users and the proportion of users accessing social media
is increasing rapidly. Smaller cities and towns (with population less than 1 million) account for a
significant portion of sales of e Retailers.

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 Middle India households to witness high growth from Fiscal 2012 to Fiscal 2030

d) Credit Penetration in India

Systemic credit to grow by 10-12% between Fiscals 2023 and 2025

- Share of NBFC credit in overall systemic credit remained 18% in Fiscal 2023

e) Retail Credit in India

The retail credit market in India stood at Rs 60 trillion as of fiscal 2023 and is rapidly growing at a CAGR
of 14.3% during Fiscals 2018 and 2023. Retail credit growth in Fiscal 2020 was around approximately
16.3% which came down to approximately 9.5% in Fiscal 2021. However, post-pandemic, retail credit
growth revived back to reach approximately 11.3% in Fiscal 2022. In Fiscal 2023, retail credit has grown
at approximately 19-20% year on year basis. The Indian retail credit market has grown at a strong pace
over the last few years and is expected to further grow at a CAGR of 13-15% between fiscal 2023 to
fiscal 2025 and reach a size of Rs 77 trillion by FY 2025. Moreover, the increasing demand and positive
sentiments in the Indian retail credit market, presents an opportunity for both banks and NBFCs to
broaden their investor base. Share of NBFC credit in the overall systemic credit remained @ 18% in
Fiscal 2023.

Retail Credit accounts for 32% of overall systemic credit for Fiscal 2023.

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 Retail Credit Growth to continue a strong footing in Fiscal 2024

Systemic non retail credit to grow with lower growth

f) Digital Payments to revolutionises NBFC lending

Digital payments have witnessed substantial growth. The share of different channels in domestic money
transfer has changed significantly over the past five years. Banks, for example, are witnessing a change
in customer behavior with fewer customers visiting bank branches for transactions. This change in
behavior was led by demonetisation when cash transactions slowed down, many new accounts were
opened, and digital banking witnessed a surge in use and continued its growth trajectory. Post- COVID-
19, with consumers preferring to transact digitally rather than engage in physical exchange of any paper
or face-to-face contact, digital transactions have received another shot in the arm.

Between Fiscal 2018 and 2023, the volume of digital payments transactions has increased from Rs14.6
billion to Rs 113.9 billion, causing its share in overall payment transactions to increase from 59% in
Fiscal 2018 to 99% in Fiscal 2023. During the same period, value of digital transactions has increased
from Rs 1,371 trillion in Fiscal 2018 to 2,087 trillion in Fiscal 2023.

Trend in volume of digital payments

Note: Digital Payments includes RTGS payments, Credit transfers (AePS, APBS, ECS Cr, IMPS, NACH, NEFT, UPI), Debit
Transfers (BHIM, ECS Dr, NACH Dr, NETC), Card Payments (Debit and Credit Cards) and Prepaid Payments Instruments

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 - Trend in value of digital payments

Note: Digital Payments includes RTGS payments, Credit transfers (AePS, APBS, ECS Cr, IMPS, NACH, NEFT, UPI), Debit
Transfers (BHIM, ECS Dr, NACH Dr, NETC), Card Payments (Debit and Credit Cards) and Prepaid Payments Instruments
Source: RBI, CRISIL MI&A

Consumers are increasingly finding transacting through mobile convenient. It is expected that the share
of mobile banking and prepaid payment instruments to increase dramatically over the coming years. In
addition, it is estimated that improved data connectivity, low digital payment penetration and proactive
government measures to drive digitalisation in the country, transforming it into a cashless economy.

The value of digital transactions as a proportion of private consumption expenditure in between Fiscal
2016 and Fiscal 2023 also rose from 1,132% to 1,265%, which shows that the usage of digital
transactions for consumption has been on the rise over the past few years.

Digital Transaction Value as a % of Private Final Consumption Expenditure (PFCE)

Note: PFCE is based on current prices; Source: RBI, CRISIL MI&A

g) Adoption of Digital Lending Practices by NBFCs

The NBFC sector in India stands at a juncture of significant transformation, driven by robust economic
growth, a conducive policy environment and an increasing emphasis on financial inclusion. As these
financial institutions continue to diversify their portfolio and adapt to the changing market dynamics,
they will be prolonged to play a crucial role. Digital will drive the NBFC growth story, with use cases
adopted across the value chain from sourcing to loan closure/cross-sell and upsell. Hyper-personalisation
of services, adoption of regional languages, product innovation and partnerships will drive growth. The
evolving customer persona in terms of a mobile-first approach, rise of influencers in the digital space
and demand for seamless and instant service will drive the NBFC growth story. Partnerships and
platforms will be crucial for NBFCs for sourcing and India Stack will be crucial for underwriting, KYC
and portfolio monitoring. The digital age will necessitate stronger cyber and data protection practices to
ensure sustainable operations. The digital story will drive NBFCs from the perspective of experience,
increased sourcing avenues, operational efficiency and risk management.

i) Lead Generation and Customer On Boarding

Most of the NBFCs have implemented multiple applications that work together to provide an integrated
customer experience. These applications include customer-facing mobile apps, customer relationship
management (CRM) systems for lead generation, lead management solutions, digital onboarding
solutions, loan origination systems and even elements of core banking solutions to cover significant parts

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 of the customer journey. To generate leads, NBFCs have formed partnerships with multiple sourcing
platforms, allowing them to reach a larger number of potential customers. One of the leading NBFCs in
the home loan segments has 93 per cent of the customers registered on mobile applications. For customer
onboarding, NBFCs are leveraging paperless processes by utilising eKYC, C-KYC, video KYC, e-
documentation, DigiLocker, account aggregators, credit bureaus and geo tagging services. For some of
these services, NBFCs are riding on the wave of open banking technology by partnering with the fintechs
that are operating in this space. NBFCs are utilising conversational AI in chatbots to address customer
inquiries, offer personalised products, provide product recommendations and identify opportunities for
cross-selling and up-selling. This strategic implementation enables NBFCs to enhance customer service,
streamline operations by reducing the size of customer service teams and improve overall efficiency by
automating routine tasks. This approach represents a true extension of omnichannel capabilities.

ii) Credit Underwriting

To enhance credit underwriting processes, NBFCs have established partnerships with fintech companies
for fraud risk management, income assessments, GST validations, MCA validations and video PD.
Additionally, NBFCs have collaborated with fintech firms that provide access to alternative data, which
aids in the creation of underwriting models and digital scorecards. The implementation of GenAI enables
AI-driven predictive analytics for better risk assessment by analysing a broader range of data points. By
adopting these approaches, NBFCs can achieve a more precise and holistic assessment of an applicant's
creditworthiness, thereby mitigating the risks associated with bad loans.

iii) Loan Documentation

NBFCs are leveraging technology to generate digital loan documents and facilitate e-Stamping and e-
Signing of these documents. The e-Signing process utilises Aadhaar-linked mobile numbers, resulting in
enhanced customer experience and improved operational efficiency. Notably, a prominent NBFC in the
home loan segment has successfully executed 60 per cent of loan agreements through e-Stamping, with
46 per cent of agreements being digitally signed

iv) Loan Disbursements

NBFCs can directly disburse funds to required accounts using various digital payment methods. This
enables seamless and real-time fund transfers to the intended accounts. These advancements significantly
contribute to expediting the loan disbursement process and facilitating seamless customer interactions.

v) Customer Servicing

The process of customer service has undergone significant changes with the introduction of WhatsApp
banking and advanced chatbots. With the help of emerging technologies such as GenAI, several customer
queries can be resolved by conversational bots. These chatbots offer more engaging and personalised
experiences, provide round-the-clock support and reduce the workload of human customer service
representatives. One of the leading NBFCs has reported that 75 per cent of its customer transactions are
taking place through digital platforms. Customers now can interact through various channels, including
web, mobile applications, WhatsApp, chatbots and voice bots. The NBFC has observed a significant
increase in the usage of chat-based servicing, with over 800,000 interactions occurring per month on
voice and chat-based platforms.

vi) Digital Collections

NBFCs are actively investing in expanding their digital presence in the collections process, which
traditionally relied heavily on physical branches and manual procedures. Nowadays, technology and
process innovation allow mainstream retail customers to have the option of making EMI payments by
accessing digital payment channels such as UPI, cards, net banking and e-NACH. One of the leading
NBFCs has reported that more than 90 per cent of its collections are now conducted through digital
channels

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h) Financial Inclusion and Rural Penetration have increased for NBFCs

The significance of financial inclusion has deepened, particularly in the post-pandemic era, as vulnerable
households and businesses strive to navigate the crises and achieve recovery. In terms of the credit to
GDP ratio, India has a low credit penetration compared with other developing countries, such as, China,
indicating a significant untapped potential. Similarly, in terms of credit to households as a proportion of
GDP as well, India lags other markets, with retail credit hovering at around 26% of GDP as of Fiscal
2023.

Credit to GDP ratio (%) (CY 2022)

Note: Data is represented for calendar years for all countries except India; For India, numbers are for Fiscal year; Source: Bank
of International Settlements, CRISIL MI&A

Household Credit to GDP ratio

100%

80%

60%

40%
India* Brazil South Africa China United States
Germany United

2017 2018 2019 2020 2021

2022
Note: For countries except India, data is represented for calendar years;
*For India, data represented is for Fiscal 2018, Fiscal 2019, Fiscal 2020, Fiscal 2021, Fiscal 2022 and Fiscal 2023; Source:
Bank of International Settlements, CRISIL MI&A

- India’s focus on financial inclusion is increasing; however, a large section of the population is still
unbanked

Adult population with a bank account (%): India vis-à-vis other countries

Note: Global Findex data for India excludes northeast states, remote islands and selected districts. Account penetration is for the

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 population within the age group of 15+; Source: World Bank - The Global Findex Database 2021, CRISIL MI&A.

Further, according to the World Bank’s Global Findex Database 2021, 230 million unbanked adults live
in India.

i) Rural India Penetration

Rural India accounts for about half of GDP, but only about 8% of total credit and 9% of total deposits.
Rural India under penetration and untapped market presents a huge opportunity for growth. Credit to
metropolitan areas has decreased over the past few years with its share decreasing from 66% as at March
31, 2018 to 62% as at June 30, 2023. Between the same period, credit share has witnessed a marginal
rise in rural and urban areas. For semi-urban areas, credit share has gone up from 12% as of March 31,
2018, to 13% as of June 30, 2023.

200 181

150 134151
123
107
100 87
62 68
70 74 69 72 77
54 62 61
70
38 37 39 40 42 46
50
46
0
Rural Semi- Urban
urban
FY16 FY17 FY18 FY19 FY20 FY21 FY22
FY23
Note: Urban includes data for Urban and Metropolitan areas Data represents only bank credit accounts
Source: RBI; CRISIL MI&A

Rural areas, which accounted for 47% of GDP, received only 8% of the overall banking credit, as at
March 31, 2023, which also shows the vast market opportunity for banks and NBFCs to lend in these
areas. With increasing focus of government towards financial inclusion, rising financial awareness,
increasing smartphone and internet penetration, it is expected that delivery of credit services in rural area
to increase. Further, usage of alternative data to underwrite customers will also help the financiers to
assess customers and cater to the informal sections of the society in these regions.

Two thirds of total household is in rural area

100%
33% 33% 34% 34% 34% 35% 35% 36%

60%

67% 67% 66% 66% 66% 65% 65% 64%

20%

2015 2016 2017 2018 2019 2020 2021 2022

Rural Urban

Source: World Bank; Census; CRISIL MI&A

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 Share of rural and semi-urban credit has increased marginally between March 31, 2018, and June
30, 2023

Note: As at the end of each Fiscal and as of June 2023 for Q1 Fiscal 2024 Source: RBI, MOSPI, CRISIL MI&A

j) NBFCs have a reasonable market share across segments

Under-served households and business represent a significant portion of India’s population challenges in
obtaining credit due to reasons such as a lack of credit history and the inability to provide collateral.
Government initiatives such as Pradhan Mantri Jan-Dhan Yojana (PMJDY), Aadhaar, and widespread
digitization (referred collectively as “JAM” trinity) have expanded the formal financial inclusion to
underserved Indian population. Additionally, the widespread availability of affordable data and digital
disruption has transformed the financing landscape in India. NBFCs have generally been able to address
this opportunity on account of their strong origination skills, extensive reach, and better customer service,
faster processing, streamlined documentation requirements, digitization of customer on-boarding
process, customized product offerings, local knowledge, and differentiated credit appraisal methodology.
The rapid evolution of Fintech’s over the last few years has added another dimension to the market served
by NBFCs and has fuelled rapid growth across the landscape.

NBFCs have consistently gained or maintained market share across most asset classes over the last few
years. Though, in certain segments such as housing finance to prime customers, they have lost market
share to banks due to the decline in market interest rates. In the gold loans market, NBFCs slightly lost
market share in Fiscal 2022 due to increasing focus of banks (both public and private) towards gold loans
as well as RBI permitting banks to offer gold loans at a higher loan-to-value amidst the COVID-19
pandemic. Nevertheless, NBFCs continue to have a healthy market share across other segments.

k) NBFC’s share in various products and projections of AUM

The NBFC sector has, over the years, evolved considerably in terms of size, operations, technological
sophistication and entry into newer areas of financial services and products. The number of NBFCs as
well as the size of the sector have grown significantly, with a number of players with heterogeneous
business models starting operations.

The retail credit has driven the NBFC sector off late

Share of retail credit in total NBFC credit to continue to grow

Note: P - Projected
Retail credit includes housing finance, auto finance, microfinance, gold loans, construction equipment finance, consumer
durable finance, MSME loans and education loans

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 Source: Company reports, CRISIL MI&A

Set forth are details of the NBFCs loan outstanding size in terms of assets under management
(AUM) and growth along with key growth drivers of each of the focused sectors:

Parameter Sub- AUM Billions Loan Key Growth Drivers

Parameter (Fiscal 2023) outstanding
(CAGR
Fiscal 2023-
Fiscal 2025)
Overall Loan 34,000 12-14%
NBFCs outstanding
growth growth
Selected asset MSME loans^ 5,231 13-15% Low credit penetration for MSMEs, increased
class wise NBFCs data availability and transparency, and
loan outstanding Government initiatives including credit
growth guarantee fund scheme, emergency credit line
guarantee scheme
Micro 1,383 23-25% Government’s continued focus on strengthening
finance rural financial ecosystem, strong credit demand
loans$ and increasing ticket sizes of loans
Consumer 4,009 18-20% Strong macro tailwinds, increased consumer
finance# spending and digitization driving consumer
durables demand
Vehicle loans* 3,277 14-15% Improving rural productivity, Government
income support, improving industrial activity,
Government’s focus on infrastructure
development and return to office
Affordable 6,902 14-16% Higher data availability, increasing
housing affordability, urbanization, and supportive
loan government policies
Agri loans 32 9-11% Increasing demand for high-value
commodities, shift to tech-intensive supply
chain solutions and increase in finance
penetration across agriculture value chain
Note: Note: (^) MSME loans include small business loans and mid-corporate loans (#) Consumer finance include personal loans,
gold loans and consumer durable loans (*) Vehicle loans include two-wheeler disbursement and new commercial vehicle loans
($) MFI loans data is for NBFC-MFIs
Source: Company reports, RBI, CRISIL MI&A estimates

Parameter Sub-Parameter Loan outstanding Loan outstanding

(CAGR (CAGR Fiscal2023-
Fiscal2018-Fiscal Fiscal 2025)
2023)
Size-wise Small NBFCs 6% 15-18%
loan Medium NBFCs 21% 15-18%
outstanding
Large NBFCs 12% 13-15%
growth
Note - Classification of players into large, medium and small is done basis below criteria:-
For MFIs - Large players have GLP> 20,000 million, medium players have GLP between 5,000 and 20,000 million, Small
players have GLP upto 5,000 million.
For other players - Large players have AUM> 50 billion, Medium players have AUM> 10 billion, Small players have AUM
upto 10 billion
Source: CRISIL MI&A estimates

Set out below are certain details of the MSME, MFI and consumer finance sectors in India:

Particulars As of and for the period ended

March 31, 2023
MSME
NBFC MSME industry AUM (Rs. In billion)** 5,231
NBFC MSME industry GNPA (%) 5.30%*

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 Particulars As of and for the period ended
March 31, 2023
MFI
## 1,383
NBFC MFI industry GNPA (%) 7.70%#
Consumer Finance
NBFC Consumer finance industry AUM (Rs in billion) ^^ 4,009

NBFC Consumer finance industry GNPA (%) 7.46%^

Note: (*) Simple average of GNPA ratio in small business loans and mid-corporate loans (^) Simple average of GNPA ratio in
personal loans, gold loans and consumer durable loans
(#) GNPA ratio for NBFC-MFIs
(**) MSME loans include small business loans and mid-corporate loans
(^^) Consumer finance includes personal loans, gold loans and consumer durable loans (##) MFI loans data is for NBFC-MFIs
Source: Company reports, RBI, CRISIL MI&A estimates

Distribution of NBFC credit across asset classes

Note: Others include education loan, consumer durable loans and construction equipment finance
Source: RBI, Company reports, CRISIL MI&A

Share of loans and advances from secured products remains high for NBFCs

l) Asset Quality for NBFCs

Asset quality for NBFCs is influenced by various factors such as economic cycle, target customer
segment, geographical exposure, and local events. Within the NBFC universe itself, it is observed that
various asset classes tend to exhibit heterogeneous behaviour. For example, the asset quality in small
business loans and personal loans tends to be highly correlated with the macroeconomic environment.
On the other hand, microfinance loans have shown lower historic correlation with macroeconomic
cycles. This is because asset quality is more influenced by local factors, events that have wide ranging
repercussions such as demonetisation and COVID-19 and relative leverage levels amongst borrowers.

Prior to Fiscal 2018, smaller NBFCs were aggressively expanding in terms of both market penetration
and lending across asset classes, which led to rising asset quality concerns. The proportion of standard

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assets declined, as slippages to sub-standard category increased. After the NBFC crisis in Fiscal 2019,
smaller NBFCs slowed down their lending activity and focused on improving their asset quality and
shifting to retail segments that are less risky. In Fiscal 2020, doubtful assets for NBFCs registered a
marginal uptick due to funding challenges and slower credit growth. However, efforts were made by
NBFCs to clean up their balance sheets, as reflected in their write off and recovery ratios, which caused
the NNPA (Net NPA) to remain stable, and the PCR (Provision Coverage Ratio) to improve.

In Fiscal 2021, proportion of doubtful and loss assets increased, largely driven by infrastructure and
wholesale finance. In addition to funding challenges faced by the sector along-with slower credit growth,
COVID-19 escalated asset quality deterioration further owing to restricted movement, which affected
collections. Moratorium and restructuring schemes announced by the Government came as an interim
relief for the sector and delayed the asset quality concerns for some time. However, with the NPA
standstill provision lifted in August 2020, gross NPAs in sector such as Auto, Microfiannce and MSME
lending spiked as of March 2021.

Further, the second wave of COVID-19 adversely affected the fragile recovery witnessed in the fourth
quarter of Fiscal 2021 and affected collection efficiencies across asset classes in the first quarter of Fiscal
2022. However, the impact was not as severe as in the first wave, and players across segments reported
improvement in GNPAs (Gross NPAs) from the second quarter.

Typically, the NBFCs ramp up their collection activity between due-date and month-end, leading to
lower dues by end of month. This flexibility will no longer be available to the NBFCs because of RBI
circular is 2021 harmonizing the rules with banks which could cause some proportion of loans in the 60
to 90-day period category to slip into >90 days period category. In addition to the end of the day
recognition, the RBI has also clarified that upgradation of an account from NPA to standard category can
only be done after all over-dues are cleared (principal along with interest), resulting in a borrower
slipping into the NPA category to remain in the same category for longer time compared to the past.
Hence, NBFC GNPAs increased in third quarter of Fiscal 2022 due to adherence to the said RBI
clarifications. But with NBFCs bolstering their collection efforts and processes, and improvement in
economic activity, it is estimated that the GNPAs for NBFCs to have reduced significantly at the end of
Fiscal 2023. The gross NPAs for NBFCs have reduced from FY17 to 5.8% in FY 22 and expected to be
around 4.8% in FY 23. It is expected the same will further reduce by at least 50 bps in FY 24.

NBFCs Gross Non Performing Assets (GNPA) improved significantly by the end of Fiscal 2023

Note: E Estimated; GNPA - Gross Non-Performing Assets as per cent of Gross Advances; NNPA Net Non-Performing Assets
as per cent of Net Advances; Provisioning Coverage Ratio (PCR) is the ratio of provisioning to gross non-performing assets
Source: RBI, CRISIL MI&A

Emerging Lending Models for NBFCs

NBFCs in India have navigated a transformative path in their lending methodologies, adapting to the
ever- evolving financial landscape. Two noteworthy approaches that have garnered attention and
reshaped the lending landscape are the First Loss Default Guidelines (FLDG) model and the Co Lending
model.

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 The First Loss Default Firstly, it enhances the risk appetite of NBFCs and banks
Guarantee (FLDG) or byinstilling confidence in banks and other regulated
Default Loss Guarantee entities tocollaborate with NBFCs and LSPs.
(DLG) model represents
aparadigm shift in the Furthermore, the NBFCs benefit from these arrangements by
approach of NBFCs transferring/sharing the risks and heavy cost of funds
towards collaborative associatedwith loan portfolios. This encourages banking
lending. These sector to invest in lending to diverse segments of the
guidelines,mandated by economy through NBFCs.
the RBI, allow NBFCs and
other Lending Service The RBI's guidelines play a pivotal role in ensuring the model's
Providers(LSPs) to effectiveness, aligning it with regulatory standards and
extend credit portfolios supervisorymeasures.
with a guaranteeagainst • By mandating adherence to stringent criteria on DLG
default losses. providers and LSPs (eligibility criteria for DLGs and cap on
Endorsed by the RBI, this default loss guarantee up to 5 per cent and tenor), the central
model provides a robust bank promotesfinancial stability and consumer protection. As
risk mitigation the guidelines onlyapply to digital lending arrangements, REs
mechanismand safety and NBFCs are encouraged to introduce technology-enabled
net by guaranteeing lending products, thereby contributing to enhanced credit
coverage forthe initial penetration and lower operational costs.
loss incurred in lending • NBFCs can leverage this opportunity to build partnerships
transactions. withbanks to build and scale up loan portfolios in
underserved segments while incurring lower cost of funds
and obtaining increased liquidity.

Co Lending Models

Complementing the FLDG model, which promotes collaboration among NBFCs and banks, the co-
lending model further inculcates confidence in collaborative partnerships. In this model, NBFCs join
forces with traditional banks to co-finance loans, leveraging the strengths of both entities. The
collaborative nature of co- lending enables NBFCs to tap into the extensive reach and resources of banks
while banks benefit from the agility and specialised knowledge of NBFCs in catering to specific market
segments. Alternative funding opportunities like the ones mentioned are great opportunities for small
fintechs, NBFCs and can also be extended to unrated NBFCs or funded by organised lenders. These
collaborative models will boost the digital lending space and provide safeguards towards regulatory
capital and maintaining quality growth in portfolio

m) Funding Sources for NBFCs

NBFCs in India, vital contributors to the financial ecosystem, face evolving challenges in securing
funds.

Sources of Borrowing for NBFCs in India

Items At the endof At the endof At the end of Percentage variation

March 2022 March 2023 September 2023 FY21–22 FY22–23
Debenture 10,14,611 11,10,234 11,45,536 3.3 9.4
(39.3) (37.0) (36.1)

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 Items At the endof At the endof At the end of Percentage variation
March 2022 March 2023 September 2023 FY21–22 FY22–23
Bank 9,20,555 11,33,221 11,97,626 18.8 23.1
borrowings (35.6) (37.7) (37.8)
Borrowing 69,078 89,982 99,844 21.3 30.3
from FIs (2.7) (3.0) (3.1)
Inter-corporate 89,896 1,05,184 1,04,148 15.5 17.0
borrowings (3.5) (3.5) (3.3)
Commercial 70,266 84,366 1,14,109 -3.2 20.1
paper (2.7) (2.8) (3.6)
Borrowing 18,562 18,750 18,758
from (0.7) (0.6) (0.6) -3.0 1.0
government
Subordinated 72,349 72,510 68.285 4.5 0.2
debts (2.8) (2.4) (2.2)
Other 3,29,182 3,87,991 4,21,653 10.6 17.9
borrowings (12.7) (12.9) (13.3)
Total 25,84,500 30,02,239 31,69,959 9.9 16.2
borrowings

Emerging sources of funds in addition to the traditional sources of funds are 1) Private Equity Funds and
Venture Capital 2) Securitisation and Asset Reconstruction Companies 3) Public Market 4) Public
Deposits 5) Foreign Direct Investment and External Commercial Borrowings 6) Fintech Partnership 7)
Green Bonds and Sustainable Financing

NBFCs in India face a challenging yet transformative landscape. By exploring alternative funding
sources and aligning strategies with regulatory measures, these financial entities can secure their future
growth and resilience.

n) Competition from Banking Industry

NBFC over the last two decades has evolved into mature lending enterprises contributing meaningfully
to India’s credit aspirations. The RBI, as the regulator, envisioned a regulated environment that strikes a
balance between supervision and freedom for NBFCs to focus on credit growth and inclusion. This
environment fostered NBFC’s into being agile and dynamic enterprises by nature.

NBFCs offer two distinct advantages compared to their larger counterparts, the banks. Firstly, their field-
heavy operating model which allowed them to underwrite customers with non-traditional income sources
and their geographically dispersed reach across the hinterlands of India, which allowed them access to
credit underpenetrated regions untouched by banks.

For NBFCs, the lack of deposit acceptance capabilities meant banks had a cost of fund advantage and
would thus out-bid NBFCs when it came to acquiring highly rated, high-income and easily accessible
retail and wholesale customers. This resulted in NBFCs inherently catering to the residual credit demand
of the country. Despite this, NBFCs today have established meaningful share across products and
continue to penetrate deeper in the landscape.

NBFCs core strategic advantage comes from their years of building know-how of borrower industries
and behaviour, gathering regional insights and developing well-oiled distribution mechanisms iteratively
over decades. Leveraging their agility, NBFCs also moved fast to adopt alternate data to better understand
their customers and develop efficiencies in underwriting which has further enabled growth.

Banks exploring previously uncharted territory.

As traditional customer pools start to dry up, both public and private banks are expanding their nets to
capture previously overlooked customer cohorts. Evidence of this can be seen in the sourcing distribution
of banks across select retail products. The share of prime, below prime customers in sourcing shows an

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 upward trend over a five-year period.

Another indicator of the shift in focus is the rising bank credit flow to previously underserved sectors
such as MSME and microfinance and the growth in Tier 2 and beyond regions, both of which have been
NBFC’s home ground. This signifies increased competition by banks with their non-bank counterparts.

Another growing phenomenon among banks is acquiring NBFC customers who have built their credit
profiles over a period, by offering competitive pricing. Thus, customer retention is a vital area of
competition.

Bank Credit to MSME (Lakh Crore)

20 23
15 16 18
CAGR
11%

Report on Trend and Progress of Banking in India 2022-2023, RBI, accessed on 24 January 2024

Scheduled commercial banks growing faster in rural and semi-urban regions

CAGR % Rural Semi Urban

(FY18–23) urban
# of accounts 9.5 % 9.6% 8.7%
Credit limits 9.7% 9.8% 9.4%
sanctioned
Source: RBI Database on Indian Economy

o) Conclusion

With the extensive adoption of technology and integration with the fintech ecosystem, disbursements
across products have been very strong for NBFCs which is likely to continue in the coming years.
Unsecured business loans with ticket size <5 lakh and secured MSME LAP with ticket size between 5–
25 lakh will drive growth in the MSME credit space. Vehicle finance is expected to register strong growth
along with affordable housing where the average ticket size is between 9 lakh to 12 lakh for NBFCs.
Gold loans with average ticket size up to 1.25 lakh have emerged as a popular and alternative route for
financing and has seen participation from various fintechs due to the secured nature of the product and
same day disbursals. As a result, the AUM for NBFCs is projected to grow by 12–14 per cent until FY25,
reaching INR42 trillion.

As at the end of September 2023, the asset quality of the sector showed further improvement as the
GNPA and NNPA ratios fell to 4.6 per cent and 1.5 per cent, respectively. This trend is expected to
sustain only if the delinquencies and asset quality are maintained within acceptable limits, composition
of unsecured loans in NBFC portfolio is in check and collections are optimised with use of technology
and analytics.

Regarding Cost of Funds NBFCs need to keep a vigilant eye on the cost of raising funds for their
operational expenses and lending. During the pandemic period, NBFCs became cautious in lending to
preserve the asset quality, which restricted AUM growth. The restricted demand drove AUM growth,
especially across higher-yielding segments, which impacted profitability positively. The low-interest
environment translated into lower cost of funds, resulting in higher spreads, which further impacted
profitability positively. This in turn has helped the NBFCs to increase their spreads and decrease their
debt levels in FY23 which is expected to remain consistent for the next ~2 years with a marginal
increase in the cost of funds only due to the rate hikes.

For Liquidity Management, NBFCs must ensure the resilience of their operations by monitoring
several liquidity indicators. These include the liquidity coverage ratio, net stable funds ratio, high-

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 quality liquid assets (HQLA) and expected cash inflows and outflows for the next 30 days. In addition
to this, it is crucial to prepare profile and monitor the liquidity at a granular maturity level.

NBFCs have consisted reported to be adequately capitalized till FY23, with capital to risk weighted
assets ratios (CRARs) well above the regulatory requirement (not less than 15 per cent of aggregate
risk-weighted assets, including both on and off-balance sheet items). The regulatory support in
exploring funding alternatives and advancement in digital lending may also impact capital adequacy
of NBFCs positively in coming years. However, it can only be sustained if NBFCs proactive strive to
advance their operation and upgrade to sophisticated practices for risk management before scaling up.

NBFCs are expected to play a crucial role in the India growth story fuelling formalised credit
penetration among the underserved. Policy push, regulatory oversight and digital across the value chain
are expected to define the growth of this sector.

Source: 1) CII-KPMG Report for NBFC, 2) NBFC Report by CRISIL & ASSOCHAM 3) Market Intelligence and Analytics for
NBFCs by CRISIL and Northern Arc.

A) MSME Lending (LAP Market) Opportunity

Purple Finance Limited is into secured MSME lending which is otherwise called LAP product.

Recently there has been significant interest from all stakeholders including regulators, industry
participants, banks, NBFCs and fintech in the loan against property product. The government’s focus on
upliftment of the MSME sector is clear, with a host of recent initiatives to boost this section of the
industry. Although NBFCs have fared well, it has only 3 per cent market share on an overall LAP product
level between FY19 and FY23, the evaluation of competitive intensity for NBFCs reveals contrasting
results when divided between low-ticket size and high-ticket size lending segments. While NBFCs have
protected their position in the smaller ticket segment, private banks are aggressively expanding across
all other ticket sizes posing significant threats to both NBFCs as well as public banks.

Market shares changes in LAP portfolio

Ticket segment HFC +NBFC Pub Bank Pvt Bank

FY19 49% 21% 24%
<50L
FY23 55% 16% 23%
6% -4% -1%
FY19 41% 10% 40%
0.5-2 Cr
FY23 39% 9% 46%
-3% -1% 6%
FY19 43% 7% 38%
2-5 Cr
FY23 34% 6% 49%
-9% -1% 11%
FY19 60% 6% 24%
>5 Cr
FY23 39% 4% 43%
-21% -2% 18%
Source: Experian Credit Bureau Data

The share of disbursements for NBFCs in unsecured loans and MSME finance, the non-traditional
segments, has increased over the past 1.5 years. In the first half of this fiscal, ~35% of incremental
disbursements were for unsecured loans. MSME finance has also posted strong growth. The traditional
segments, too, have seen improvement in volumes, but remain range bound compared with previous
years. The LAP portfolio NPAs have reduced from 4.7% in March 21 to 4.3% in March 22.

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Small business loans grew at a fast pace, registering a CAGR of 15% over Fiscal 2018 and 2023. Over
the years, more data availability and government initiatives like GST has led to increasing focus of
lenders, especially the NBFCs, on the underserved segment of MSME customers as lending to this
segment has become easier compared to the past. It is estimated that outstanding small business loans
given out by banks and NBFCs to be around Rs 11.7 trillion as of March 2023.

Over past few years, players offering MSME loans have expanded their branch network with the intent
to serve a larger customer base. In the future also, it is expected that lenders with a strong focus on
MSME lending and healthy competitive positioning to continue to invest in branch expansion. With
increasing branch network, customer acquisition and credit penetration, share of MSME loans is also
expected to increase. Number of branches have grown at 16% CAGR over Fiscals 2017 and 2023 and is
around 6638 branches.

Source: 1) CII-KPMG Report for NBFC, 2) NBFC Report by CRISIL & ASSOCHAM 3) Market Intelligence and Analytics
for NBFCs by CRISIL and Northern Arc

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 OUR BUSINESS

ABOUT THE COMPANY

1) HISTORY OF THE COMPANY

Purple Finance Limited was originally incorporated as a Private Limited Company under the name of
“Devipura Balaji Securities & Investments Private Limited” under the provisions of the Companies Act,
1956 on November 09, 1993 issued by the Registrar of Companies, Mumbai, Maharashtra. The
Company was subsequently converted into Public Limited Company as “Devipura Balaji Securities &
Investments Limited” vide fresh Certificate of Incorporation dated July 20, 1998. The Company was
registered under section 45-IA of The Reserve Bank of India Act, 1934 and received the certificate of
registration from Reserve Bank of India ("RBI") dated July 20, 1999, having Registration no. 13.01268
to commence/ carry on the business of non-banking financial institution without accepting deposits. Our
Company is registered with RBI as a Base Layer Non-Systemically Important Non-Deposit taking Non-
Banking Finance Company (NBFC-ND-ICC). Devipura Balaji Securities & Investments Limited
acquired K K Financial Services Private Limited on September 13, 2013. Pursuant to the aforesaid
acquisition, the Company applied for name change to Registrar of Companies, Mumbai and received a
Certificate of Registration approving change in name to ‘Purple Finance Limited’ vide Certificate of
Incorporation dated November 26, 2013.

Further, the Hon’ble NCLT, Mumbai Bench on February 15, 2024 has approved the Scheme of Merger
by Absorption of Canopy Finance Limited by Purple Finance Limited. Pursuant to the merger of the
Company with CFL, the equity shares of the Company have been listed on BSE w.e.f. June 14, 2024 and
on CSE w.e.f. June 18, 2024.

(Note: Canopy Finance Limited (CFL) was a Non-deposit Non-Banking Financial Company registered with Reserve Bank of India
and was inter-alia engaged in the business of lending money for financing Industrial Enterprises by way of making loans and
advances or by subscribing to their Capital Structure. They carried out all the objectives of a NBFC Company and were mainly
dealing in lending loans and advances.)

2) CURRENT BUSINESS MODEL

PFL ventured into retail MSME secured lending in October 2022 and operates in tier II, III & tier IV
cities, offering loans to micro and small entrepreneurs in a ticket size between ₹3 lakh to ₹30 lakh. PFL
leverages technology to make its processes more efficient. It has built a robust tech platform for
underwriting that enables seamless and paperless loan approvals. PFL has opened 25 branches has
empowered more than 2000 lives through best of technology adoption and giving them access to
affordable, adequate and timely credit. In an era where MSMEs are the backbone of Indian economy,
PFL’s role as a lending Company has never been more critical. PFL has not only provided financial
support but also served as a guiding force for several small entrepreneurs, helping them turn their dreams
into thriving businesses. PFL intends to become a new age digital NBFC inter-alia currently engaged in
the business of offering small size secured business loans across India predominantly in tier II, III & tier
IV cities. PFL with its superior technology platform aspires to simplify the existing processes in the
mortgages segment and is confident of making a difference to the MSME borrowers with simplified
funding options and timely loan disbursements.

3) DISBURSEMENT AND NUMBER OF CUSTOMERS

From inception, PFL has disbursed to around 800 customers amounting to INR 45 crore. All loans are
secured by either Self Occupied Residential or Commercial property. PFL uses advanced technology to
lend to customers.

4) Lending Policies and Procedures

a) Overview

We are a Base Layer NBFC registered with the RBI. RBI regulates NBFCs with various regulations and

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 rules which come out periodically through various Master Directions. Within the regulatory guidelines,
directions and circulars, NBFCs can establish their own credit approval processes. As such, once a
Company has obtained a NBFC license, the terms, credit levels, and interest rates of loans and any credit
approvals are based upon the NBFC’s established internal credit approval processes framed in
accordance with applicable regulations.

We have a team of experienced officers in our credit appraisal and risk management teams to develop
and implement our credit approval policies. Our credit approval policies focus on credit structure, credit
approval authority, customer selection and documentation provided by the customer. Our risk
management and appraisal systems are regularly reviewed and upgraded to address changes in the
external environment.

b) Customer Appraisal and Approval Process

We have dedicated units that appraise and approve loan applications operating at the branch office and
head office levels. Each office must independently approve a prospective customer’s loan application
before any loan offer is made. We follow an exhaustive internal appraisal process that includes:

• Identity verification, residence and office address verification and fraud check and compliance
with the KYC guidelines as per the regulatory guidelines;

• Applicant’s credit-worthiness, such as applicant’s past history from credit bureaus, and other
database checks for litigation, credit, defaults;

• Assessment of applicant’s ability to repay and sources for such repayment, through various
documents such as bills, banking statement, ITR and GST return wherever applicable;

• As we are into small Self-Employed Mass-market segment which is mostly Micro business in
nature, customers do not have documented income proof. We rely on Personal Discussions
through visit of Credit Managers in the branches, kaccha bills and reference checks to arrive at
income:

• Assessing the quality, value and enforceability of the collateral which includes a legal and
technical assessment of the proposed collateral, site visit through an external team as well as an
internal team;

• Verifying the purpose and end-use of the loan.

We believe that our thorough credit approval process has, in part, allowed us to grow our Loan Book
with low delinquency rates.

c) “GO NO GO” PROCESS

PFL has an unique approach for deciding a “Go and No Go” status of a proposal entirely through digital
process without collecting any documents. The same is decided based on trilogy of credit bureau score,
KYC sufficiency and collateral search. PFL has adopted a process of online collateral search which is
quite robust.

The “Go No Go” process is depicted pictorially as below

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 This digitally advanced paperless process differentiates PFL from competitors by giving faster and
accurate decision, avoiding wastage of productive manpower time and increase in productivity of
Relationship Managers.

d) Customer Appraisal Process

The customer appraisal process begins at the branch office level. All applications for secured loans by
prospective customers must be submitted on our mobile application. The Relationship Managers process
the loan application through mobile application on their mobile and collect on boarding fees online. The
KYC of prospective customers are verified online through verification of KYC documents, including
proof of name, date of birth, address and signature, as well as documents relating to the property to be
purchased. The entire process is digital.

To be eligible for a secured business loan, each prospective customer must either be presently having a
business which is acceptable to PFL with an established business track record and sufficient earnings.
Each such prospective customer is also required to provide requisite documentation for income
verification purposes. The prospective self-employed customers are required to submit bills along with
bank statements, proof of establishment of business, proof of vintage of business. Borrowers which are
proprietorships or companies are also required to submit certain approvals maintained by them in relation
to their business and operations.

Once a prospective customer has submitted a completed application, credit officers in the branch office
verify various details and go for personal discussion. We check the credit history and credit- worthiness
of the customer on various credit bureaus to ascertain the financial obligations of the customer and to
ensure that the customer has a clean repayment track record, such as consumer credit reports from CIBIL
and CRIF for delays/defaults by the borrower. We also carry out various reference checks with the
customer’s buyers, sellers and as well as with the customer’s neighbours. We carry out title and legal
checks, including interest checks through filings made to Central Registry of Securitization Asset
Reconstruction and Security Interest of India, on the collateral to ensure that it has the first and sole
charge on it. We conduct property valuations and also engage external property valuers to assess the
properties. Additionally, checks are also undertaken by our risk control unit to make sure that the
customer is genuine, and the details provided are authentic. We do 100% of collateral property checks
by external Risk Control Units. Also profile and KYC checks are done through Risk control Unit on
need basis.

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 For loans, we have implemented various approval levels on a delegated basis, depending on the size of
the financing and other metrics. Critical policy revisions (e.g. new products, income programmes, etc.)
are jointly approved by the Board and the authorized committee. The composition and authority of the
committee is approved and notified by the Board from time to time. The minutes of meeting of each
committee is reported to the Board. Also, the Business rule engine like LTV and FOIR and other
parameters are auto calculated by the system and accordingly the loan goes to the relevant credit approver
tray, Also the deviation matrix is pre-defined in the system alongwith approval authority.

Once the application review process is completed, the loan is sanctioned by the mandated approval
authority. A credit decision is then communicated to the customer.

Before disbursing the loan, we must receive either electronic clearance instructions or post-dated
cheques from the customer for the EMI payments. We also receive an additional cheque for the principal
amount of the loan, which we can present if the loan becomes pre-payable for any reason.

The disbursement process is online. We have pre-filled legal documents which can be generated online
and customer can sign through Adhaar enabled digital signature. The NACH can be registered online.
We do Registered mortgages for all cases. The entire disbursement process in digital.

Once the direct debit authorizations and/or cheques have been received, legal documents completed and
registered mortgage done, the funds are disbursed to the customer. PFL has an integrated Loan
Origination and Loan Management system which talks through API.

The entire process flow which is paperless is depicted below.

e) Loan Origination and Sourcing Process

Our customers are sourced by in-house Relationship Managers (“RM”), external direct sales agents
(“DSAs”), cold calling, exhibitions, and through branch walk-ins. Our “feet-on-street” RMs based out
of branches covers and penetrates the semi-urban and rural customer segments. We also have connectors
who sources customers for us. As on date we have 109 Relationship Managers in branch offices and 422
external DSAs/ Connectors who are our touch points. We operate in mostly semi urban and Tier III and
Tier IV cities.

We also rely on DSAs and small connectors for referring potential customers. Our DSAs and connectors
are typically individual/ proprietorships and self-employed professionals who primarily work with
multiple small businesses providing consulting services. They pass on leads of any loan requirements of

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 these small businesses to us. These DSAs and connectors do not work exclusively with us and may also
work with other lenders, including our competitors. DSAs and connectors pass on leads to us and
fulfilment is done by our Relationship Managers digitally.

f) Portfolio Monitoring

Our risk management, external auditors and collection departments review and monitor our loan
portfolio. These departments monitor debt repayment levels of particular loan exposures on a continuous
basis. This allows us to identify potentially problematic loans at an early stage and prepares us for
immediate action if any principal or accrued interest repayment problems arise.

The Executive Risk Management Committee comprising of senior members meet every month and
deliberate on the product, portfolio and policy. This RMC reports into the RMC of the Board and all
RMC minutes are tabled in the Board meeting.

The portfolio is monitored by way of various analyses consisting of:

• Disbursement and AUM growth
• Branch wise month on board
• Geographical coverage
• Concentration of exposure based on type of property
• Ticket size concentration trend and bounce
• Exposure CIBIL score wise and trend
• Bounce based on ticket size
• Bounce based on LTV and FOIR
• Month on Board bounce analysis
• FOIR +LTV bounce analysis
• Gross income bounce analysis
• Monthly collection progression
• Awareness calling and SMS effectiveness
• RCU MIS
• NPA cases analysis

Regular collection of the loans happens through NACH/ECS mode. Instrument is presented on the
respective due date of the loans. Account level bounce reports are published to stakeholders at regular
intervals. Bounce cases are first handled by Relationship Managers and unresolved cases are allocated
to field collection team.

We have a dedicated inhouse recovery team that manages the loan administration and collection of
overdue cases. Once the account is allocated to collection staff, they visit and collect the overdue amount
through online transfer via a payment gateway or cheque payment. Cases which remain uncollected for
a longer period are closely monitored by managers and necessary legal action is initiated against the
customer to recover the monies.

5) Asset Recovery and Non-Performing Loans

Once an account is classified as an NPA, in accordance with the RBI Master Directions, proceedings
under the various legal recourse commence. The proceedings commence with the issuance of a notice to
the borrower and/or the co borrowers calling upon them to pay the demanded amount within 60 days. In
the case of non-compliance, another notice is issued for taking over symbolic possession of the
mortgaged property. Thereafter, applications seeking police assistance for taking physical possession of
the mortgaged property are filed before the magistrates and collectors concerned.

We then obtain a valuation of the mortgaged property and fix the reserve price and put it up for auction.
At times, the property is also sold through private arrangements after obtaining the consent of the
borrower. Portions of the portfolio where the likelihood of repayment is remote are written off.
Subsequent recoveries on these portions are recognized directly in our income statement but the asset
itself is not regularized and remains written off.

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 In addition to initiating proceedings under the SARFAESI Act, in the event that EMI or principal
repayment cheques issued by our customers are dishonored on account of insufficiency in funds, we
initiate proceedings under the Negotiable Instruments Act, 1881 (the “Negotiable Instruments Act”) or
the Payment and Settlement Systems Act, 2007 (“PSS Act”) for asset recovery and NPAs. Upon the
receipt of the relevant information and documents such as the physical cheque and bouncing memo or
dishonor of electronic funds transfer, proceedings under the Negotiable Instruments Act or PSS Act, as
applicable, may be initiated by serving a notice demanding payment. If no payment is received within
the stipulated period, a criminal complaint is filed before the competent court having jurisdiction to try
the case. After the trial, if the accused person(s) are convicted, they are liable for imprisonment or fine
or both.

We also initiate arbitration proceedings based on arbitration clauses in our loan agreements. Once the
arbitrator accepts the request for appointment, he/she sends acceptance in writing to all the parties to the
dispute and calls upon the claimant to file the statement of claim. We file our statement of claim before
the arbitrator and if required, an application under the Arbitration and Conciliation Act, 1996 seeking
appropriate interim reliefs. If the respondent(s) do not appear in the arbitration proceedings even after
due service, they proceed on an ex parte basis. The proceedings are conducted in accordance with the
procedure stipulated by law and by the arbitrator. After adjudication, ex parte or otherwise, an award is
passed by the arbitrator.

As on 30th June 2024 out of 750 customers we have only one customer who is NPA amounting to
INR 6.41 Lakhs.

6) Corporate Governance

Our Company strives to adhere to high standards of corporate governance and has established policies
and procedures to support transparency, strong business ethics and a well-established compliance
framework, including internal audit functions. Our Board comprises of three Independent Directors and
operates distinctly from our executive management and supervises our operations through committees
designed to manage and oversee key aspects of our business. The Company has always been committed
to the principles of good Corporate Governance which helps enhancement of long-term shareholder
value and interest. This is achieved through increased awareness for responsibility, transparency and
professionalism and focus for effective control and management of the organization. We adhere not only
to regulatory requirements but also to sound Corporate Governance principles, continuously evolving
into our framework through constant review of the Board processes, practices and the management
systems to maintain a greater degree of responsibility and accountability.

7) Human Resource

PFL recognizes that Human capital is one of the most critical assets of any business enterprise. Guided
by this very philosophy the Company ensures recruitment of the most suitable manpower, trains them to
handle their respective roles, empowers them to discharge their duties well and provide an enabling
environment for their professional growth. The company has a well-defined on-boarding process and
well-structured post joining induction process. The Company lays a lot of emphasis on imparting
adequate training and regular training sessions are organized covering business processes and
procedures, customer service standards, underwriting process, collection, and credit disbursals functions
and so on. The Company also has deployed a digitally advanced Human Resource Management System
(HRMS) to automate most of the HR processes and controls. Currently the company employs around
216 people.

8) Our Strengths

a) Strong asset quality with consistent low level of NPAs

The quality of our loan portfolio is reflected in the consistent low level of NPAs. We believe that our
robust credit approval mechanisms, credit control processes, audit and risk management processes and
policies help us maintain the quality of our loan portfolio. We have in place product specific lending
policy, and various committees set up by the Board with defined terms of references. We routinely

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 monitor credit risk, risk concentration and compliance with board approved policies. Credit monitoring
for retail products is undertaken at portfolio level wherein risk assessment is undertaken on various
parameters like demographics, sector, geography, etc. As part of the credit assessment, we analyze
income potential, applicant’s business performance/earnings history to assess their ability to repay loans.
In addition to document verification and credit bureau reports, we conduct site verifications, interviews,
as well as market and banking reference checks on the applicant, co-applicant, as applicable. As on 30th
June 2024 out of 750 borrowers we have one case which is NPA amounting to INR 6.41 lakhs.

b) Robust systems with a strong focus on digitization

We believe our well-defined business processes ensure efficient achievement of organizational tasks and
in turn effective service to our customers. Our robust credit approval and credit control processes, strong
operations unit, independent audit unit for checking compliance with the prescribed policies, and risk
management processes and policies provide for multiple checks and verifications for both legal and
technical parameters. Our loan approval and administration procedures, collection and enforcement
procedures are designed to minimize delinquencies and maximize recoveries. Further, we have a strong
focus on digitization across all organizational functions and believe technology is a business enabler for
our Company. Our technology driven processes aid in product innovation, reduced turnaround times,
cost optimization and superior customer experience thereby creating balanced scalable growth models.
We are incrementally leveraging technology to streamline processes across the loan lifecycle including
sourcing and on-boarding, underwriting, administration, monitoring and collection in order to further
improve turnaround times, enhance the quality of service provided to customers as well as achieve a
higher degree of productivity within the organization. We believe technology driven processes will
facilitate us to respond to market opportunities and challenges swiftly, help monitor process and
performance, and improve our risk management capabilities. We believe that our end-to-end digitized
processes, robust loan management system and strong analytics abilities offer us a significant
competitive advantage. Our systems have the capability of end-to-end customer data capture,
computation of income, collateral data capture, and repayment management. Our loan approval is
controlled by the loan origination system which is both mobile and web based. Our systems are
customized for our services and help us reduce turnaround time and enhance our processes and
operational excellence. Our systems fully integrate businesses in every aspect bringing together various
departments in simple transitions and customer information updates. Continuous enhancement of our
technology capabilities allows us better informed decision making and faster execution along with strong
internal control mechanisms. We have completely digitized our secured business loans journey, right
from customer on-boarding to underwriting, disbursements and collections. We have collaborated with
the fintech ecosystem to further enhance our platform and customer experience. With these strong
partnerships, we intend to co-create solutions for enhanced experience in MSME lending. We have
enabled digital and secured MSME loan, wherein the entire journey is paperless – communication for
accepting sanction letter and e-agreement is sent to eligible customers sent via SMS. The disbursement
is automatic with no manual intervention. Strong physical and digital footprint A strong physical as well
as digital footprint is very important in our business, as it increases reach and access to customers.

c) A strong and experienced founders and management team

We are led by qualified and experienced Board of Directors and key managerial personnel. The Board
comprises five directors with significant experience in the banking and finance sector. The Founder and
Co-Founder team also comes with significant banking and financial services experience. The members
of our executive management team also have significant experience in the products and services offered
by us. We believe that our senior management and experienced executives are and would continue to be
the principal drivers of our growth and success in all of our businesses; and that their extensive relevant
experience and financial acumen will continue to provide us with a distinct competitive advantage. Our
management organization structure is designed to support increasing product line with a dedicated team
of executives with substantial experience in their particular business segment. A detailed experience of
the BOD and management team is given in the Chapter “Our Management” on page no. 84.

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9) Our Strategy

Our key strategy is to steadily grow high quality, diversified retail assets focusing on under-banked
segments, with effective risk management and cost optimization through well-defined processes and
leveraging technology.

Key elements of our strategy are:

i) Address growing financial needs in under-served markets

With a significant portion of the population still being outside the reach of the formal credit system, our
Company believes in contributing to bridging the credit gap in the country. We aim to efficiently and
effectively provide credit to the underserved segment of the country with secured product offering. With
our growing branch network, retail focus and a product suite catering to all classes of MSME customers,
we aim to contribute to financial inclusion in the country.

ii) Build capacity and grow customer base through retail focus and geographic expansion

We intend to utilize our growing branch network to access a larger customer base and plan to expand
our network as relevant with the aim of achieving deeper penetration in existing products and regions as
well as tap new, lucrative markets. While assessing a potential branch site, we analyse the local market
and proximity to target customers with the objective of providing ease of access to customers as well as
enhancing brand visibility for our Company. Our diversification and expansion strategy aims to adapt to
a constantly changing digital milieu, and thereby seize growth opportunities whilst remaining cognizant
to associated risks to our value chain. We operate on Hub and Spoke model to build in efficiency, speed
and cost competitiveness.

iii) Achieve superior performance with further strengthening our operating processes and risk
management system

We are focused on building a process driven organization with a culture of compliance, audit and risk
management. Operations excellence and risk management forms an integral part of our business. Our
processes have been standardized with the objective of providing high levels of service quality and we
have implemented high levels of digitization in our operational processes which contribute to faster
turnaround times with lesser incidence and occurrence of errors. Our risk management procedures are
integrated seamlessly across our business operations and ensure constant measurement and monitoring
of various risks we are subject to. The risk management model involves initial management control at
business entity level, risk control and compliance oversight functions and overall independent audit and
assurance functions. We intend to continue to improve our operating processes and risk management
systems that will further enhance our ability to manage the risks inherent to our business.

iv) Focus on efficient use of technology

Technology has played an important role, particularly in financial sector. Embedded Finance has been a
game changer and has enabled us to cater to large number of customers of channel partners in an effective
manner. We continue to follow Digital / Physical process of lead generation, evaluation of customers,
credit appraisal & disbursement provides real time loan decisions and superior customer experience. We
intend to continue investing in technology to improve our operational efficiencies, productivity and to
strengthen our position in increasingly sophisticated and competitive market.

v) Attract and retain experienced professionals

Our Company is being promoted by experienced banking and financial services veteran with cumulative
150+ years of experience. Also, the senior management is qualified professionals with vast experience
in financial services sector, credit evaluation, risk management, technology, and marketing. We
continuously innovate and engage with our team to retain and grow them with the organisation. We will
continue strategizing and looking at our HR practices which will be comparable to the best in the industry
to retain the talent and groom them.

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 OUR MANAGEMENT

The composition of our Board is governed by the provisions of the Companies Act, the rules prescribed
thereunder, the SEBI Listing Regulations, the norms of the code of Corporate Governance as applicable to listed
companies in India and the Articles of Association. As on date of filing of this Letter of Offer, we have six (6)
Directors on our Board, comprising of 2 (two) Executive Directors, 3 (three) Non-Executive Independent
Directors including 1 (one) Independent-women director along with 1 (one) Non-Executive Non-Independent
Women Director. Our Company is in compliance with the corporate governance norms prescribed under the SEBI
Listing Regulations and the Companies Act, 2013, in relation to the composition of our Board and constitution of
committees thereof.

Set forth below are details regarding our Board as on the date of filing of this Letter of Offer:

No. Name, age, address, DIN, date of Designation Other directorships

birth, term, period of directorship,
occupation
1 Amitabh Chaturvedi Executive Nil
Chairman
Age: 56 years

Address: 2904, Tower 2B, Sumer

Trinity Tower, New Prabhadevi Road,
Mumbai-400025

DIN: 00057441

Date of Birth: April 08, 1968

Term: Not Liable to retire by rotation

Period of Directorship: Since March 9,

2022

Occupation: Service
2 Rajeev Deoras Executive • Fino Paytech Limited
Director
Age: 64 years

Address: 1906, D- Wing Rustomjee

Seasons, Nana Dharmadhikari Road,
Bandra East, Mumbai, Maharashtra –
400 051

DIN: 02879519

Date of Birth: September 22, 1959

Term: Not liable to retire by rotation

Period of Directorship: Since March 9,

2022

Occupation: Service
3 Minal Chaturvedi Non-Executive, • Jigsaw Financial Technology
Non-Independent Private Limited
Age: 59 years Women Director

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No. Name, age, address, DIN, date of Designation Other directorships
birth, term, period of directorship,
occupation

Address: 2904, Tower 2B, Sumer

Trinity Tower, New Prabhadevi Road,
Mumbai-400025

DIN: 05315800

Date of Birth: May 5, 1965

Term: Liable to retire by rotation

Period of Directorship: Since

December 20, 2013
Occupation: Service
4 Ajay Kumar Pandey Independent • Nelco Limited
Director • Nelco Network Products Limited
Age: 63 years

Address: Flat No: 1402, Glendale,

Hiranandani Gardens Powai, Mumbai
4000076

DIN: 00065622

Date of Birth: September 24, 1961

Term: From June 28, 2023 till June 27,

2026

Period of Directorship: Since March

28, 2023

Occupation: Service
5 Amit Sonawala Independent • National Refinery Private Limited
Director
Age: 57 years

Address: 3/ 69, Al- Jabreya Court, 1st

Floor, Marine Drive, Mumbai - 400020

DIN: 01790348

Date of Birth: October 29, 1966

Term: From February 29, 2024 till

February 28 2027

Period of Directorship: Since March 9,

2022

Occupation: Service
6 Sumeet Sandhu Independent • Nil
Director
Age: 47 years

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 No. Name, age, address, DIN, date of Designation Other directorships
birth, term, period of directorship,
occupation

Address: House no. 52F, Block – F,

Shaheed Bhagni Singh Nagar, Model
Town, Ludhiana 141002

DIN: 10119062

Date of Birth: February 3, 1977

Term: From June 28, 2023 till June 27

2026

Period of Directorship: Since June 28,

2023

Occupation: Service

Brief Profile of our Directors

Amitabh Chaturvedi

Amitabh Chaturvedi is the Promoter and Executive Chairman of our Company. He has been associated with our
Company since March 09, 2022. He is a Chartered Accountant and has over 30 years of proven experience in the
Banking, Financial Services and Insurance (“BFSI”) domain with strategic expertise in Banking, Asset
Management, Insurance, Lending and Wealth Management functions. He has worked in large organisations like
ICICI Bank, Dhanlaxmi Bank and Reliance Capital. During his stint with ICICI Bank, he worked in diverse areas
of Planning, Treasury, Retail Banking, and Distribution. He gained immense experience in raising resources and
managing large portfolios. Currently Amitabh Chaturvedi looks after the overall affairs of the Company.

Rajeev Deoras

Rajeev Deoras is the Executive Director of our Company. He has been associated with our Company since March
09, 2022. He is an Engineering graduate (Bachelor of Engineering) and has 40 years of experience in building
corporate banking, credit, risk and private equity functions. He pursued the CAIIB Associate Examination in the
year 1991 and has held leadership roles in ICICI Bank, Kotak Mahindra Bank, Dhanlaxmi Bank, ADCB India
and Essel Finance. He has set up banking franchises and enterprise risk management practices. Apart from being
a core strategist, his understanding of the credit and risk management practices has helped build large and
progressive Organizations. Currently Rajeev Deoras looks after the risk functions, credit and compliance of the
Company.

Minal Chaturvedi

Minal Chaturvedi is the Non-Executive Non- Independent Director and also the Promoter of our Company. She
has been on the Board of our Company since 2013. She is a commerce graduate with 11 years’ experience in the
corporate lending and syndication. She was earlier responsible for business development. She’s a commerce
graduate from Mumbai University. Apart from this, Minal Chaturvedi is also renowned yoga practitioner, who
holds several certifications in therapeutic yoga.

Ajay Kumar Pandey

Ajay Kumar Pandey is a Non-Executive Independent Director of our Company. He has been associated with our
Company since June 28, 2023. He holds B.E. Honors in Mechanical Engineering and has over 35 years of senior
management experience in Information Technology, Power, Energy and Infrastructure sectors across developed
and developing markets in USA, Africa and Asia. He has expertise in the functional areas viz. Business
Leadership, Strategy, Telecoms, Power & Infrastructure and Urban Planning. On a professional front, Ajay has

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worked as Managing Director and Group CEO of GIFT CITY, Chairman of the Board of Nelco Limited (Tata
Group), and President of Corporate Affairs and Business Opportunities at Tata Communication Limited.

Sumeet Sandhu

Sumeet Sandhu is a Non-Executive Independent Director of our Company. She has been associated with our
Company since June 28, 2023. She has Post Graduate Diploma in Management and over 22 years of experience
across Investments & Insurance, in the financial industry and has launched new segments, products and channels
as well as set up new businesses from ground up to build market share and create value. She has worked across
India and UAE with organizations such as Finbuddys, Abu Dhabi Islamic Bank, Barclays, Mashreq, and HDFC
Bank On a professional front, Sumeet has worked as Head of Wealth at Findbuddys UAE, Country Head in UAE
at Karvy Private Wealth, Head of Expat Priority Banking at the Abu Dhabi Islamic Bank, and Product Head of
Investments, Insurance & Liabilities at Barclays.

Amit Sonawala

Amit Sonawala is a Non-Executive Independent Director of our Company. He has been associated with our
Company since February 29, 2024. He is a Commerce and Law graduate with 30 years of extensive and diverse
experience in business, legal matters, Company affairs and Corporate compliance His ability to make astute and
strategic decisions has been a valuable asset throughout his career. On a professional front, he has worked in
National Refinery Pvt. Ltd. as an Executive Director.

Confirmations

1. Neither Company nor our Directors are declared as fugitive economic offenders as defined in Regulation
2(1)(p) of the SEBI ICDR Regulations and have not been declared as a ‘fugitive economic offender’
under Section 12 of the Fugitive Economic Offenders Act, 2018.

2. None of the Directors of our Company have held or currently hold directorship in any listed company
whose shares have been or were suspended from being traded on any of the stock exchanges in the five
years preceding the date of filing of this Letter of Offer, during the term of his/ her directorship in such
company.

3. None of the Directors of our Company are or were associated in the capacity of a director with any listed
company which has been delisted from any stock exchange(s) at any time in the past.

4. None of our Directors have been debarred from accessing capital markets by the Securities and Exchange
Board of India. Additionally, none of our Directors are or were, associated with any other Company
which is debarred from accessing the capital market by the Securities and Exchange Board of India.

5. None of our Directors have been identified as a wilful defaulter or fraudulent borrower, as defined in the
SEBI Regulations and there are no violations of securities laws committed by them in the past and no
prosecution or other proceedings for any such alleged violation are pending against them.

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Management Organisation Structure

Corporate Governance

The provisions of the SEBI Listing Regulations and the Companies Act with respect to corporate governance are
applicable to us. We are in compliance with the requirements of the applicable regulations, including the SEBI
Listing Regulations, Companies Act and the SEBI ICDR Regulations, in respect of corporate governance
including constitution of our Board and Committees thereof. Our corporate governance framework is based on an
effective independent Board, separation of the Board’s supervisory role from the executive management team and
constitution of the Board Committees, as required under law.

Our Board undertakes to take all necessary steps to continue to comply with all the requirements of the SEBI
Listing Regulations and the Companies Act. Our Board functions either directly, or through various committees
constituted to oversee specific operational areas.

Committees of our Board

Our Board has constituted following committees in accordance with the requirements of the Companies Act and
SEBI Listing Regulations:
1. Audit Committee;
2. Nomination and Remuneration Committee;
3. Stakeholders’ Relationship Committee;
4. Risk Management Committee.

Terms of Reference of Various Committees

1) Audit Committee

The Audit Committee was re-constituted on February 29, 2024 and constitutes of the following members:

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 Name Designation
Ajay Kumar Pandey Chairman
Amitabh Chaturvedi Member
Sumeet Sandhu Member
Amit Sonawala Member

The Company Secretary acts as the secretary of the Audit Committee.

The scope, functions and the terms of reference of the Audit Committee is in accordance with the Section
177 of the Companies Act, 2013 and Regulation 18(3) Securities Exchange Board of India (Listing
Obligations and Disclosure Requirements) Regulations, 2015 read with Schedule II Part C.

The Role of Audit Committee, together with its powers, are as follows:

(i) oversight of our financial reporting process and disclosure of its financial information to ensure
that the financial statement is correct, sufficient and credible;
(ii) recommendation for appointment, remuneration and terms of appointment of auditors of our
Company;
(iii) approval of payment to statutory auditors for any other services rendered by the statutory
auditors;
(iv) reviewing, with the management, the annual financial statements and auditor's report thereon
before submission to the Board for approval, with particular reference to:
(a) matters required to be included in the director’s responsibility statement to be included
in the board’s report in terms of Section 134(3)(c) of the Companies Act, 2013;
(b) changes, if any, in accounting policies and practices and reasons for the same;
(c) major accounting entries involving estimates based on exercise of judgment by the
management;
(d) significant adjustments made in the financial statements arising out of audit findings;
(e) compliance with listing and other legal requirements relating to financial statements;
(f) disclosure of any related party transactions;
(g) modified opinion(s) in the draft audit report;
(v) reviewing, with the management, the quarterly financial statements before submission to the
Board for approval;
(vi) Monitoring the end use of funds raised through public /Rights /Preferential offers and related
matters;
(vii) reviewing, with the management, the statement of uses / application of funds raised through an
issue (public issue, rights issue, preferential issue, etc.), the statement of funds utilized for
purposes other than those stated in the Issue document / Red Herring Prospectus / notice and
the report submitted by the monitoring agency monitoring the utilisation of proceeds of a public
or rights issue, and making appropriate recommendations to the Board to take up steps in this
matter;
(viii) reviewing and monitoring the auditor’s independence and performance, and effectiveness of
audit process;
(ix) approval or any subsequent modification of transactions of our Company with related parties;
(x) scrutiny of inter-corporate loans and investments;
(xi) valuation of undertakings or assets of our Company, wherever it is necessary;
(xii) evaluation of internal financial controls and risk management systems;
(xiii) reviewing, with the management, performance of statutory and internal auditors, adequacy of
the internal control systems;
(xiv) reviewing the adequacy of internal audit function, if any, including the structure of the internal
audit department, staffing and seniority of the official heading the department, reporting
structure coverage and frequency of internal audit;
(xv) discussion with internal auditors of any significant findings and follow up there on;
(xvi) reviewing the findings of any internal investigations by the internal auditors into matters where
there is suspected fraud or irregularity or a failure of internal control systems of a material nature
and reporting the matter to the Board;

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 (xvii) discussion with statutory auditors before the audit commences, about the nature and scope of
audit as well as post-audit discussion to ascertain any area of concern;
(xviii) to look into the reasons for substantial defaults in the payment to the depositors, debenture
holders, shareholders (in case of non-payment of declared dividends) and creditors;
(xix) to review the functioning of the whistle blower mechanism;
(xx) approval of appointment of chief financial officer after assessing the qualifications, experience
and background, etc. of the candidate;
(xxi) carrying out any other function as is mentioned in the terms of reference of the audit committee.
(xxii) reviewing the utilization of loans and/ or advances from/investment by the holding company in
the subsidiary exceeding ₹100 crores or 10% of the asset size of the subsidiary, whichever is
lower including existing loans / advances / investments existing as on the date of coming into
force of this provision; and
(xxiii) consider and comment on rationale, cost-benefits and impact of schemes involving merger,
demerger, amalgamation etc., on the listed entity and its shareholders.
(xxiv) management discussion and analysis of financial condition and results of operations;
(xxv) management letters / letters of internal control weaknesses issued by the statutory auditors;
(xxvi) internal audit reports relating to internal control weaknesses; and
(xxvii) the appointment, removal and terms of remuneration of the chief internal auditor shall be subject
to review by the audit committee.
(xxviii) statement of deviations:
a. quarterly statement of deviation(s) including report of monitoring agency, if applicable,
submitted to stock exchange(s) in terms of Regulation 32(1).
b. annual statement of funds utilized for purposes other than those stated in the offer
document/prospectus/notice in terms of Regulation 32(7).
(xxix) Any other responsibility as may be assigned by the Board from time to time.

2) Nomination and Remuneration Committee

Our Nomination and Remuneration Committee was re-constituted on February 29, 2024, and constitutes
of the following members:

Name Designation
Sumeet Sandhu Chairperson
Ajay Kumar Pandey Member
Amit Sonawala Member

i. The terms of reference of the committee are as follows: Formulation of the criteria for
determining qualifications, positive attributes and independence of a director and recommend
to the board of directors a policy relating to the remuneration of the directors, key managerial
personnel and other employees. Formulation of the criteria for determining qualifications,
positive attributes and independence of a director and recommend to the board of directors a
policy relating to the remuneration of the directors, key managerial personnel and other
employees.
ii. Formulation of criteria for evaluation of performance of independent directors and the Board of
directors.
iii. Devising a policy on diversity of board of directors.
iv. Identifying persons who are qualified to become directors and who may be appointed in senior
management in accordance with the criteria laid down and recommend to the board of director
their appointment and removal.
v. Whether to extend or continue the term of appointment of the independent director, on the basis
of the report of performance evaluation of independent directors.
vi. Recommend to the board, all remuneration, in whatever form, payable to senior management.

3) Stakeholders Relationship Committee

Our Stakeholders Relationship Committee was formed on February 29, 2024, and constitutes of the
following members:

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 Name Designation
Ajay Pandey Chairman
Amitabh Chaturvedi Member
Rajeev Deoras Member
Sumeet Sandhu Member

The role of the committee shall inter-alia include the following:

i. Resolving the grievances of the security holders of the Company including complaints related
to transfer/transmission of shares, non-receipt of annual report, non-receipt of declared
dividends, issue of new/duplicate certificates, general meetings, etc.
ii. Review of measures taken for effective exercise of voting rights by shareholders.
iii. Review of adherence to the service standards adopted by the Company in respect of various
services being rendered by the Registrar & Share Transfer Agent.
iv. Review of the various measures and initiatives taken by the Company for reducing the quantum
of unclaimed dividends and ensuring timely receipt of dividend warrants/annual
reports/statutory notices by the shareholders of the Company.

4) Risk Management Committee

Our Risk Management Committee was re-constituted on February 29, 2024, and constitutes of the
following members:

Name Designation
Rajeev Deoras Chairman
Amitabh Chaturvedi Member
Sumeet Sandhu Member

The role of the committee shall inter-alia include the following:

(i) Recommending overall Risk Management framework for the Company;
(ii) Approving product policies along with assessment methodologies and customer profiling;
(iii) Monitoring of the risk profile, performance and management of the Company’s credit portfolio;
(iv) Formation and amending credit risk policies;
(v) Approving delegation of appropriate credit limits to the executive management;
(vi) Enterprise Continuity management including but not limited to business continuity
management, crisis management and discover recovery;
(vii) Reviewing reports from management concerning the Company’s annual insurance strategy,
including the adequacy of coverage and limits of insurance policies;
(viii) Provision of reports on any material matters arising out of the insurance program during the
year;
(ix) Reviewing the adequacy and effectiveness of the Compliance program established within the
Company;
(x) Reviewing any findings or notices received from any regulators viz. Reserve Bank of India,
Registrar of Companies, etc. and actions taken by the Company to address the same and overall
statutory reporting requirements pertaining to regulators;
(xi) Reviewing the processes in place for ensuring that new and changed legal and regulatory
requirements are identified and reflected in Company’s processes;
(xii) Reviewing nature and effectiveness of action plans implemented to address identified
compliance weaknesses.
(xiii) To formulate a detailed risk management policy which shall include:
a. A framework for identification of internal and external risks specifically faced by the
listed entity, in particular including financial, operational, sectoral, sustainability
(particularly, ESG related risks), information, cyber security risks or any other risk as
may be determined by the Committee.
b. Measures for risk mitigation including systems and processes for internal control of
identified risks.

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 c. Business continuity plan.
(xiv) To ensure that appropriate methodology, processes and systems are in place to monitor and
evaluate risks associated with the business of the Company;
(xv) To monitor and oversee implementation of the risk management policy, including evaluating the
adequacy of risk management systems;
(xvi) To periodically review the risk management policy, at least once in two years, including by
considering the changing industry dynamics and evolving complexity;
(xvii) To keep the board of directors informed about the nature and content of its discussions,
recommendations and actions to be taken;
(xviii) The appointment, removal and terms of remuneration of the Chief Risk Officer shall be subject
to review by the Risk Management Committee.

5) Finance Committee

Our Finance Committee was re-constituted on July 29, 2024 and constitutes of the following members:

Name Designation
Amitabh Chaturvedi Chairman
Rajeev Deoras Member
Minal Chaturvedi Member
Amit Sonawala Member

The role of the committee shall inter-alia include the following:

(i) Reviewing the investment strategy, asset allocation, investment decision, benchmarking and
other operating guidelines;
(ii) Providing financial analysis, advice, and oversight of the Company’s budget;
(iii) Ensuring the organization is operating with the financial resources it needs to provide programs
and services to the community.
(iv) All decision making for raising of funds by way of issuance of equity and/or debt in the
Company.
(v) To monitor the changing environment in the money market / capital market and accordingly,
advise on any changes to the investment strategy;
(vi) Approval for opening of different Bank Accounts of the Company for various purposes;
(vii) Approve the annual budget and submit it to the Board for approval;
(viii) Ensuring the maintenance of an appropriate capital structure;
(ix) Developing an investment strategy where necessary;
(x) Any modifications / exceptions to investment policy shall be recommended by the Finance
Committee for approval by the Board in its next meeting.

Additionally, with regards to the proposed issue, the role of the Finance Committee shall inter-alia
include the following:
(i) To decide on the Objects of the Rights Issue;
(ii) To appoint and enter into arrangements with Merchant Bankers / Lead Managers, legal counsel,
registrar, ad-agency, banker(s) to the Rights Issue and all other intermediaries and advisors
necessary for the Rights Issue, to enter into and execute all such arrangements, contracts /
agreements, memorandum, documents, etc., in connection therewith;
(iii) To negotiate, authorize, approve and pay commission, fees, remuneration, expenses and/ or any
other charges to the applicable agencies/ persons and to give them such directions or instructions
as the Committee may deem fit from time to time.
(iv) To negotiate, finalise, settle and execute the issue agreement, registrar agreement, ad-agency
agreement, banker to the issue agreement and any other agreement with an intermediary and all
other necessary documents, deeds, agreements and instruments in relation to the Rights Issue,
including but not limited to any amendments / modifications thereto;
(v) To take necessary actions and steps for obtaining relevant approvals from SEBI, the Stock
Exchanges, Depositories, RBI, or such other authorities, whether regulatory or otherwise, as
may be necessary in relation to the Rights Issue;
(vi) To finalise the Issue Documents and any other documents as may be required and to file the
same with SEBI, Stock Exchanges and other concerned authorities and issue the same to the

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 Shareholders of the Company or any other person in terms of the Issue Documents or any other
agreement entered into by the Company in the ordinary course of business;
(vii) To approve, finalize and issue in such newspapers as it may deem fit and proper all notices,
including any advertisement(s) / supplement(s) / corrigenda required to be issued in terms of
SEBI ICDR Regulations or other applicable SEBI guidelines and regulations or in compliance
with any direction from SEBI and / or such other applicable authorities;
(viii) To decide in accordance with applicable law, the terms of the Rights Issue, the total number,
issue price and other terms and conditions for issuance of the Equity Shares to be offered in the
Rights Issue, and suitably vary the size of the Rights Issue, if required, in consultation with the
Lead Manager(s);
(ix) To fix the record date for the purpose of the Rights Issue for ascertaining the names of the
eligible Shareholders who will be entitled to the Equity Shares, in consultation with the Stock
Exchanges; to decide the rights entitlement ratio in terms of number of Equity Shares which
each existing Shareholder on the record date will be entitled to, in proportion to the Equity
Shares held by the eligible Shareholder on such date;
(x) To open bank accounts with any nationalised bank/ private bank / scheduled bank for the
purpose of receiving applications along with application monies and handling refunds in respect
of the Rights Issue;
(xi) To decide on the marketing strategy of the Rights Issue and the costs involved;
(xii) To decide in accordance with applicable law on the date and timing of opening and closing of
the Rights Issue and to extend, vary or alter or withdraw the same as he may deem fit at his
absolute discretion or as may be suggested or stipulated by SEBI, the Stock Exchanges or other
authorities from time to time;
(xiii) To issue and allot Equity Shares in consultation with the Lead Manager(s), the registrar, the
designated Stock Exchange and the Stock Exchanges and to do all necessary acts, execution of
documents, undertakings, etc., with National Securities Depository Limited and Central
Depository Services (India) Limited, in connection with admitting the Equity Shares issued in
the Rights Issue;
(xiv) To authorize any person to sign the listing applications, documents pertaining to the rights issue
and issue ASBA instructions and share certificates.
(xv) To apply to regulatory authorities seeking their approval for allotment of any unsubscribed
portion of the Rights Issue (in favour of the parties willing to subscribe to the same); to decide,
at his discretion, the proportion in which the allotment of additional Equity Shares shall be made
in the Rights Issue;
(xvi) To take such actions as may be required in connection with the creation of separate ISIN for the
credit of rights entitlements in the Rights Issue;
(xvii) To dispose of the unsubscribed portion of the Equity Shares in such manner as it may think most
beneficial to the Company, including offering or placing such Equity Shares with promoter and
/ or promoter group/ banks/ financial institutions / investment institutions/ mutual funds/ foreign
institutional investors/ bodies corporate or such other persons as he may in his absolute
discretion deem fit;
(xviii) To make necessary changes and to enter the names of the renounce(s), if they are not members
of the Company in the register of members of the Company;
(xix) To decide the mode and manner of allotment of the Equity Shares if any not subscribed and left
/ remaining unsubscribed after allotment of the Equity Shares and additional Equity Shares
applied by the Shareholders and renounce(s);
(xx) To settle any question, difficulty or doubt that may arise in connection with the Rights Issue
including the issue and allotment of the Equity Shares as aforesaid and to do all such acts, deeds
and things as the Board may in its absolute discretion consider necessary, proper, desirable or
appropriate for settling such question, difficulty or doubt and making the said Rights Issue and
allotment of the Equity Shares; and to take all such steps or actions and give all such directions
as may be necessary or desirable in connection with the Rights Issue and also to settle any
question, difficulty or doubt that may arise in connection with the Rights Issue including the
issuance and allotment of Equity Shares as aforesaid and to do all such acts and deeds in
connection therewith and incidental thereto, as he may in his absolute discretion deem fit.

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Our Key Managerial Personnel

Sabyasachi Rath is our Chief Executive Officer, Sonal Vira is our Chief Financial Officer, and Ruchi Nishar is
our Company Secretary and Compliance Officer. Our Company does not have any other Key Managerial
Personnel, as on the date of filing of this Letter of Offer.

Sabyasachi Rath is the Chief Executive Officer of our Company and was appointed on August 02, 2022, and has
over 23 years of experience in banking. He obtained his Bachelor’s degree in Electrical Engineering from
Sambalpur University in May 1994 and Diploma in Business Finance from ICFAI University in 1995, along with
a Post Graduate Diploma in Business Administration from ICFAI Business School in 1997. On a professional
front, he has worked previously with Essel Business Loans Finance Limited and Essel Finance Management LLP.
Further, he has worked in Karvy Financial Services Ltd, and PT Bank Maybank Indonesia. Sabyasachi Rath
oversees the day-to-day business of the Company.

Sonal Vira is the Chief Financial Officer of our Company and was appointed on October 3, 2022, and has over
19 years of experience in banking. She obtained her Bachelor’s degree in Commerce from University of Mumbai,
in the Chartered Accountant Exam held by ICAI in 2004. On a professional front, she has worked as a Vice
President of Corporate Banking and Senior Relationship Manager during her tenure with DCB Bank Limited from
October 29, 2019, to October 01, 2022. She has also worked as the Chief Manager in Dhanlaxmi Bank from
August 14, 2009, and as a Relationship Manager for Corporate Banking in Abu Dhabi Commercial Bank from
August 31, 2012. Sonal Vira oversees the day-to-day financial actions/management/ treasury functions of our
Company.

Ruchi Nishar is the Company Secretary and Compliance Officer of our Company and was appointed on
November 01, 2022. She oversees the day-to-day secretarial compliance of our Company.

Status of each Key Managerial Personnel

All the Key Managerial Personnel of our Company are permanent employees.

Retirement and Termination Benefits

Other than the statutory benefits that the Key Managerial Personnel are entitled to, upon their retirement, the Key
Managerial Personnel of our Company have not entered into any service contracts pursuant to which they are
entitled to any benefits upon termination of employment or retirement.

Relationship amongst Key Managerial Personnel

None of the Directors or Key Managerial Personnel are related to each other except Amitabh Chaturvedi and
Minal Chaturvedi. Amitabh Chaturvedi is the spouse of Minal Chaturvedi.

Our Senior Managerial Personnel

Souvik Dasgupta is our Chief Business Officer, Vinay Patel is our Head of Operations and Technology, Mrinalini
Sahai is our Head of Legal & Compliance, Saurabh Lall is our Head of Credit, Asim Padhi is our Head of Product
and Policy and Gunjan Browne is our Head of Human Resources. Our Company does not have any other Senior
Management Personnel as on date of this Letter of Offer.

Souvik Dasgupta is the Chief Business Officer of our Company, appointed on August 2, 2022. He obtained his
Executive Masters of Business Administration from SP Jain School of Global Management. On a work front,
Souvik has worked as the business head at Essel Finance Business Loans Ltd, Treasury and Wholesale Business
Head at Essel Forex Ltd, Vice-President of Foreign Exchange and National Sales Head at Wall Street Finance
Ltd, Regional Channel Manager at HDFC Bank Bangalore, Regional Manager at Travelex (India) Private Limited,
New Delhi, and Zonal Head at Reliance Money Express Ltd.

Vinay Patel is the Head of Operations and Technology of our Company, appointed on June 16, 2022. He has over
20 years of experience in Operations and Credit Risk Analytics in the Banking and Financial Services sector. He
obtained his Bachelor’s degree in Commerce (Accountancy) from Mumbai University in 1993 his Chartered

| 94 |
Accountancy certification from ICAI in 1997, and appeared for the CAIIB Examination in 2010. On a work front,
he has previously been associated with Hiranandani Financial Services as Head of Central Operations, Reliance
Capital Limited as Senior Manager – Credit in Corporate, First Leasing Co. of India Ltd. as Regional Head of
Mumbai-West Region, Intec Capital Ltd. as Associate Vice-President of Operations and Essel Finance Business
Loan Ltd. as Head of Operations.

Mrinalini Sahai is the Head of Legal and Compliance of our Company, appointed on August 2, 2022. She has
worked as the Assistant Manager of the legal department at Essel Finance Management LLP and the Manager of
Legal & Compliance at Karvy Capital Limited.

Saurabh Lall is the Head of Credit of our Company, appointed on June 21, 2023. He obtained his Bachelor’s
degree in Science from Punjab University in 1987. On a professional front, he has worked as the Credit and Risk
Head in Mumbai at Satin Finserv Ltd and Barota Finance Ltd.

Asim Padhi is the Head of Product and Policy of our Company, appointed on May 15, 2024. He obtained his
Bachelor’s degree in Engineering (Mining) from the Regional Engineering College (NIT) Rourkela in 1997 and
his Post-Graduate Diploma in Management from Xavier’s Institute of Management in 2000. He has worked as
the Chief Operating Officer at Fly Hi Financial Services Limited, Vice-President of Credit & Risk at Karvy
Financial Services, National Credit Manager of SME Loans at Reliance Commercial Finance Limited, and Chief
Manager of Securitisation and Business Analytics & Operations at Reliance Commercial Finance Limited.

Gunjan Browne is the Head of Human Resources of our Company, appointed on June 27, 2023. She obtained
her Master’s degree in Commerce from Mumbai University in 2008 and her PGDBM from LLAM in 2007. She
has worked HBL Global Private Limited, Zonal Head and HRBP at Fedbank Financial Services Ltd. and was
Assistant Manager at Standard Chartered Securities Ltd.

Status of each Senior Managerial Personnel

All the Senior Managerial Personnel of our Company are permanent employees.

Retirement and Termination Benefits

Other than the statutory benefits that the Senior Managerial Personnel are entitled to, upon their retirement, the
Senior Managerial Personnel of our Company have not entered into any service contracts pursuant to which they
are entitled to any benefits upon termination of employment or retirement.

Relationship amongst Senior Managerial Personnel

None of the Senior Managerial Personnel are related to each other

| 95 |
 OUR PROMOTERS AND PROMOTER GROUPS

The Promoters of our Company are Amitabh Chaturvedi, Minal Chaturvedi, Abhishek Chaturvedi, Asher Foods
Private Limited and Saguna Mercantile Private Limited.

1. Amitabh Chaturvedi:

Amitabh Chaturvedi is the Promoter and Executive Chairman of our Company. He has been associated
as a Director with our Company since March 09, 2022. He is a Chartered Accountant and has over 30
years of experience in the Banking, Financial Services and Insurance (“BFSI”) domain with strategic
expertise in Banking, Asset Management, Insurance, Lending and Wealth Management functions. He
has worked in large organisations like ICICI Bank, Dhanlaxmi Bank and Reliance Capital. During his
stint with ICICI Bank, he worked in diverse areas of Planning, Treasury, Retail Banking, and
Distribution. He gained immense experience in raising resources and managing large portfolios.
Currently Amitabh Chaturvedi looks after the overall affairs of the Company.

Directorship held in other companies:

As of date of this Letter of Offer, he is holding directorship in below mentioned companies:

Nil

2. Minal Chaturvedi

Minal Chaturvedi is the Non-Executive Non- Independent Director and also the Promoter of our
Company. She has been on the Board of our Company since 2013. She is a commerce graduate with 15
years’ experience in the corporate lending and syndication. She was earlier responsible for business
development. She’s a commerce graduate from Mumbai University. Apart from this, Minal Chaturvedi
is also a yoga practitioner, holding several certifications in therapeutic yoga.

Directorship held in other companies:

As of date of this Letter of Offer, she is holding directorship in below mentioned companies:

a. Jigsaw Financial Technology Private Limited

3. Abhishek Chaturvedi

Abhishek Chaturvedi is the Promoter of our Company. He has his BA (Honors) in Global Financial
Management from Regent’s University, London. He has vast experience of more than 9 years in the
Corporate Banking sector. He was working as a Deputy Manager- Customer Service with ICICI Bank in
Dubai in grade of GCC-1B.

Directorship held in other companies:

As of date of this Letter of Offer, he is holding directorship in below mentioned companies:

a. Jigsaw Financial Technology Private Limited

4. Asher Foods Private Limited (“Asher Foods”)

Corporate Information

Asher Foods was originally incorporated in 2001 under the Companies Act, 1956. The registered office
of Asher Foods is located at Room No.11, First Floor, Indu Chamber 349/353, Samuel Street, Vagadi,
Masjid, Bunder, Mumbai - 400003

| 96 |
 Asher Foods is engaged in the business of manufacture, distribution, importation and exportation of
various types of processed food items.

Asher Foods is promoted by Amitabh Chaturvedi and Minal Chaturvedi

The securities of Asher Foods are not listed on any stock exchange, in India or abroad

Shareholding Pattern

Set forth below are the details of the shareholding of the Promoters:

Sr. No. Names of the Shareholders Number of equity shares % of total shareholding
held
1. Amitabh Chaturvedi 9,800 98.00%
2. Minal Chaturvedi 200 2.00%
Total 10,000 100.00%

Brief Financial Details

Set forth below is the standalone financial information of Asher Foods based on its audited financial
statements for the last three financial years:
(₹ in lakhs)
Particulars March 31, 2023 March 31, 2022 March 31, 2021
Issued and paid-up Equity Share 1.00 1.00 1.00
Capital
Reserves and Surplus (excluding (12.56) (17.76) (16.07)
revaluation reserves)
Sales/ Turnover/ Other Income 66.67 1.17 0.73
Profit/ (Loss) after Tax 0.52 (0.17) 0.24
Basic and Diluted EPS per share 52.05 (17.00) 2.39
Net Asset Value per equity share (115.6) (167.6) (150.66)

5. Saguna Mercantile Private Limited (“Saguna Mercantile”)

Corporate Information

Saguna Mercantile was originally incorporated in 2010 under the Companies Act, 2013. The registered
office of Saguna Mercantile is located at 301, Third Floor, Corporate Arena Off, Aarey Piramal X Road,
Goregaon (West) Mumbai - 400062

Saguna Mercantile is engaged in the business of buying, selling and trading of various goods.

Saguna Mercantile is promoted by Ashish Trivedi and Om Trivedi

The securities of Saguna Mercantile are not listed on any stock exchange, in India or abroad

Shareholding Pattern

Set forth below are the details of the shareholding of the Promoters:

Sr. No. Names of the Shareholders Number of equity shares % of total shareholding
held
1. Ashish Trivedi 75,900 99.87%
2. Om Trivedi 100 0.13%
Total 76,000 100.00%

| 97 |
 Brief Financial Details

Set forth below is the standalone financial information of Saguna Mercantile based on its audited
financial statements for the last three financial years:
(₹ in lakhs)
Particulars March 31, 2023 March 31, 2022 March 31, 2021
Issued and paid-up Equity Share Capital 760.00 760.00 760.00
Reserves and Surplus (excluding 15,652.46 15,664.10 15,724.99
revaluation reserves)
Sales/ Turnover/ Other Income Nil Nil Nil
Profit/ (Loss) after Tax 11.64 60.88 8.67
Basic and Diluted EPS per share 0.15 0.80 0.11
Net Asset Value per equity share - - -

Confirmations

1. Our Promoter and members of our Promoter Group have not been declared as wilful defaulters
by the RBI or any other governmental authority and there are no violations of securities laws
committed by it in the past or are currently pending against them.

2. Our Promoter and members of our Promoter Group have not been declared as a Fugitive
Economic Offender under Section 12 of the Fugitive Economic Offenders Act, 2018.

3. Our Promoter and members of our Promoter Group have not been debarred or prohibited from
accessing or operating in capital markets under any order or direction passed by SEBI or any
other regulatory or governmental authority. Our Promoter and members of our Promoter Group
are not and have never been promoter of any other company, which is debarred or prohibited
from accessing or operating in capital markets under any order or direction passed by SEBI or
any other regulatory or governmental authority.

4. There are no litigation or legal action pending or taken by any ministry, department of the
Government or statutory authority during the last 5 (five) years preceding the date of the Issue
against our Promoter.

PROMOTER GROUP

Our Promoter Group as defined under Regulations 2(1)(pp) of the SEBI ICDR Regulations includes the following
individuals and body corporates: For Promoter Group, we have restricted it only to the entities that hold equity
shares in the Company and have been disclosed as Promoter Group to the Stock Exchanges in the shareholding
pattern.

The following is the promoter group, with their shareholding pattern as on date of filing of the LOF:

Sr. No. Name of Promoter Group No. of Shares Percentage (%)

1 Anil Kumar 8,62,000 2.56
2 M.K. Investment Consultancy Private Limited 32,053 0.10
3 Souvik Dasgupta 1,50,000 0.45
4 Mrinalini Sahai 50,000 0.15
5 Tomorrow Capital Enterprises Private Limited 3,33,333 0.99
6 Surendra Sodhi 5,75,016 1.71
7 Debashish Mishra 6,33,333 1.88
8 Sunil Mittal 2,50,000 0.74
9 Dilip Kumar Mittal 2,50,000 0.74
10 Rushabh Shah 83,340 0.25
11 Swati Mohapatra 71,000 0.21
12 Ashis Mohanty 3,33,294 0.99

| 98 |
 Sr. No. Name of Promoter Group No. of Shares Percentage (%)
13 Venugopalan Swaminathan 75,000 0.22
14 Raoul Kapoor 75,000 0.22
15 Ajit Sharma 1,75,000 0.52
16 Shouryendu Ray 76,000 0.23
17 Manas Ray 76,000 0.23
18 Jaiprakash Pandey 15,000 0.04
19 Neeta Shah 15,000 0.04
20 Dharmesh Shah 15,000 0.04
21 Emy Mody 50,000 0.15
22 Amol Shah 25,000 0.07
23 Neema Popat 22,000 0.07
24 Ashish Popat 22,000 0.07
25 Ramawatar Sharma 20,000 0.06
26 Saroj Shukla 5,000 0.01
27 Vrishali Wadhivkar 45,820 0.14
28 Ranjana Pathak 41,72,362 12.41
29 Satyaprakash Pathak 11,46,735 3.41
30 Ashray Charitable Trust 7,61,904 2.27
31 Rajeev Deoras 4,00,000 1.19
32 Sabyasachi Rath 3,00,000 0.89
33 Sonal Vira 3,00,000 0.89

The following is the list of Promoter Groups seeking reclassification, who have requested the Company to
reclassify them from Promoter Group to Public category along with a rationale for the same and a description as
to how the conditions specified in Regulation 31A(3)(b) of the Listing Regulations are satisfied. Pursuant to which
the Company has submitted an application with Stock Exchange for re-classification on August 07, 2024:

Sr. No. Name of Promoter Group No. of Shares Percentage (%)

1 Anil Kumar 8,62,000 2.56
2 M.K. Investment Consultancy Private Limited 32,053 0.10
3 Souvik Dasgupta 1,50,000 0.45
4 Mrinalini Sahai 50,000 0.15
5 Tomorrow Capital Enterprises Private Limited 3,33,333 0.99
6 Surendra Sodhi 5,75,016 1.71
7 Debashish Mishra 6,33,333 1.88
8 Sunil Mittal 2,50,000 0.74
9 Dilip Kumar Mittal 2,50,000 0.74
10 Rushabh Shah 83,340 0.25
11 Swati Mohapatra 71,000 0.21
12 Ashis Mohanty 3,33,294 0.99
13 Venugopalan Swaminathan 75,000 0.22
14 Raoul Kapoor 75,000 0.22
15 Ajit Sharma 1,75,000 0.52
16 Shouryendu Ray 76,000 0.23
17 Manas Ray 76,000 0.23
18 Jaiprakash Pandey 15,000 0.04
19 Neeta Shah 15,000 0.04
20 Dharmesh Shah 15,000 0.04
21 Emy Mody 50,000 0.15
22 Amol Shah 25,000 0.07
23 Neema Popat 22,000 0.07
24 Ashish Popat 22,000 0.07
25 Ramawatar Sharma 20,000 0.06

| 99 |
 Sr. No. Name of Promoter Group No. of Shares Percentage (%)
26 Saroj Shukla 5,000 0.01
27 Vrishali Wadhivkar 45,820 0.14

Post reclassification, the following would be the Promoter Group holding:

Sr. No. Name of Promoter Group No. of Shares Percentage (%)

1. Ranjana Pathak 41,72,362 12.41
2. Satyaprakash Pathak 11,46,735 3.41
3. Ashray Charitable Trust 7,61,904 2.27
4. Rajeev Deoras 4,00,000 1.19
5. Sabyasachi Rath 3,00,000 0.89
6. Sonal Vira 3,00,000 0.89
1,99,05,907 59.21

| 100 |
 DIVIDEND POLICY

The declaration and payment of dividends will be recommended by the Board of Directors and approved by the
Shareholders, at their discretion, subject to the provisions of the Articles of Association and applicable law,
including the Companies Act. The dividend, if any, will depend on a number of factors, including but not limited
to, net operating profit after tax, working capital requirements, capital expenditure requirements, cash flow
required to meet contingencies, outstanding borrowings, and applicable taxes payable by our Company. In
addition, our ability to pay dividends may be impacted by additional factors, including restrictive covenants under
loan or financing arrangements our Company is currently availing of or may enter into to finance our fund
requirements for our business activities.

We have not adopted a formal dividend policy and have not declared any dividend in the previous three (3)
financial years immediately preceding this issue.

| 101 |
SCTION V – FINANCIAL INFORMATION

FINANCIAL STATEMENTS

| 102 |
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132
Purple Finance Limited
[CIN: U67120MH1993PLCO75037]
Note 1 -Significant accounting policies
A Company Information
Purple Finance Limited is a Public Limited Company with registered office at Room No. 11, lst Floor, Indu Chamber
349/353, Samuel Street, Vadgadi, Masjid Bunder (West), Mumbai, MH 400 003 IN and corporate office at 705/ 706, 7th
Floor, Hallmark Business Plaza, Opp. Gurunanak Hospital, Bandra East, Mumbai, MH, IN, 400 051. The Company is
registered under section 45-IA of the Reserve Bank of India Act 1934 as a NBFC - Investment && Credit Company (Non
Deposit) and is in the lending business of primarily lending loans to Corporate & Non-corporate entities.

Pursuant to the Hon'ble National Company Law Tribunal, Mumbai bench's ("NCLT") approval of the Scheme of Merger
by Absorption, Canopy Finance Ltd (CFL) with its entire undertaking amalgamated with the company. Prior to
initiating the application process with NCLI, the said scheme had already garnered endorsement from the Reserve Bank
of India ("RBI"), Bombay Stock Exchange ("BSE"), and The Calcutta Stock Exchange ("CSE"), Upon the receipt of the
signed order from NCLT on 15th February 2024, our company diligently submitted form INC 20 to the Registrar of
Companies, Mumbai on 29th February 2024.

Furthermore, we have initiated the requisite procedures for obtaining listing approval and trading approval as
applicable from both BSE and CSE on 19th March 2024. Notably, we are pleased to announce that we have received in
principle approval for listing from BSE on 18th April 2024. While we eagerly await approval from CSE, the process is
currently underway.

B Significant Accounting Policies

Basis of preparation:
The financial statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind AS)
as per the Companies (ndian Accounting Standards) Rules, 2015, as amended by the Companies (ndian Accounting
Standards) Rules, 2016, notified under the Section 133 of the Companies Act, 2013 ('the Act) and other relevant
provisions of the Comparies Act, 2013. The financial statements have been prepared under the historical cost
convention, except for certain financial instruments that are measured at fair values at the end of each reporting period.
The financial statements have been prepared as per the guidelines issued by the RBI as applicable to a NBFCs and other
accounting principles generally accepted in India. Any applicable guidance/ clarifications / directions issued by RBI or
other regulators are implemented as and when they are issued / applicable.

The regulatory disclosures as required by Master Direction -Non-Banking Financal Company -Systemically Important
Non- Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, 2016 issued by the RBI are
prepared as per the Ind AS financial statements, pursuant to the RBI notification on Implementation of Indian
Accounting Standards, dated March 13, 2020. Accounting policies have been consistently applied except where a newly
issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the
accounting policy hitherto in use.
In the preparation of the financial statements, Management makes estimates, judgements and assumptions that affect the
application of accounting policies and the reported amounts of assets and liabilities (including contingent liabilities) as
of the date of the financial statements and the reported income and expenses during the year. Although these estimates
are based on the management's best knowledge of current events and actions, uncertainty about these judgements,
assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of
assets or liabilities in future periods.

The financial statements are presented in Indian Rupees in thousands (INR 000 or Rs. in 000) which is also the
functional curency of the Company and all values are rounded to the nearest thousand, except when otherwise
indicated.

For allperiods up to AANAL&A he year ended March 31, 2023, the Company preparedi t a
ncudhng
F ments in
accordance with accomfnglátandara notified under the section 133 of the Companies Act est,togthr with
paragraph 7 of the CopaniessAcgoits) Rules, 2014 (Indian GAAP or previous GAAP). Thes finyncialRiehnts for
133 pa
ACCO
Purple Finance Limited
[CIN: U67120MH1993PLCO75037]
Note 1-Significant accounting policies

the year ended 31 March 2024 are the first the Company has prepared in accordance with Ind AS.
Refer to notes for information on how the Company adopted Ind AS.
2 Presentation of financial statements:
The finaneial statements of the Company are presented as per Schedule II (Division II) of the Companies Act, 2013
applicable to Non-banking Finance Companies (NBFCs), as notified by the MCA. The Statement of Cash Flows is
presented as per the requirements of Ind AS 7 -Statement of Cash Flows. Thedisclosure requirements with respect to
items in the Balance Sheet and Statement of Profit and Loss, as prescribed in the Schedule lI to the Act, are presented by
way of notes forming part of the financial statements alongwith the other notes required to be disclosed under the
notified Ind AS. Financial assets and financial liabilities are generally reported on a gross basis except when, there is an
unconditional legally enforceable right to offset the recognised amounts without being contingent on a future event and
the parties intend to settle on a net basis in the following circumstances:
(i) The normal course of business
(ii) The event of default
(ii) The event of insolvency or bankruptcy of the Company and/or its counterparties

3 Financial instruments:
A finanial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity
instrument of another entity.

Initial recognition and measurement

Financial assets and financial liabilities are recognised in the Company's balance sheet when the Company becomes a
party to the contractual provisions of the instrunment. Financial instruments are initially measured at their fair value
adjusted for transaction costs/fees which are directly attributable to acquisition of financial assets or financial liabilities,
except in the case of financial assets and financial liabilities recorded at FVTPL in which case transaction costs/fees are
recognised immediately in statement of profit and loss. A financial asset and a financial liability is offset and presented
on net basis in the balance sheet when there is a current legally enforceable right to set-off the recognised amounts and it
is intended to either settle on net basis or to realise the asset and settle the liability simultaneously.

Financial assets:
The Company assesses the classification and measurement of a financial asset based on the contractual cash Alow
characteristics of the asset and the Company's business model for managing the asset.

The Company has more than one business model for managing its financial instruments which reflect how the Company
manages its financial assets in order to generate cash flows. The Company's business models determine whether cash
flows will result from collecting contractualcash flows, selling financial assets or both.
The Company considers all relevant information available when making the business model assessment. However, this
assessment is performed on the basis of scenarios that the Company reasonably expects to occur and not so-called worst
case' or'stress case' scenarios.

The Company reassess its business models each reporting period to determine whether the business models have
changed since the preceding period. If the business model under which the Company holds financial assets changes, the
financial assets affected are reclassified, The classification and measurement requirements related to the new
category
apply prospectively from the first day of the first reporting period following thechange in business model that result in
reclassifying the financial assets.

Based on the business paadet for managingthe asets and the asset's contractual terms, the Company anans
lmite
financial assets into 6ne of thefolywing three measurement categories:
M. No.
122197 134 Numbai
Purple inance Limited
[CIN: U67120MH1993PLCO75037]
Note 1 - Significant accounting policies

(a) Financial assets at amortised cost:

Financial assets are subsequently measured at amortised cost using theeffective interest rate (EIR) if these financial
assets are held within a business model whose objective is to hold these assets in order to collect contractual cash flows
and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of
principal and interest on the principal amount outstanding.

(b)Financial assets at fair value through other comprehensive income (FVTOCI):

Financial assets are measured at fair value through other comprehensive income if these financial assets are held within
a business model whose objective is achieved by both collecting contractual cash flows that give rise on specified dates to
sole payments of principal and interest on the principal amount outstanding and by selling financial assets.

(c)Financial assets at fair valuethrough profit or loss (FVTPL):

Financial assets are mneasured at fair value through profit or loss unless it is measured at amortised cost or at fair value
through other comprehensive income on initial recognition. The transaction costs directly attributable to the acquisition
of financal assets and liabilities at fair value through profit or loss are immediately recognised in profit or loss.
Derecognition
Derecoguition of financial assets due to substantial nodification of terns and conditions
The Company derecogrises a financial asset, such as a loan to a customer, when the terms and conditions have been
renegotiated to the extent that, substantially, it becomes anew loan, with the difference recognised as derecognition gain
or loss, to the extent that an impairment loss has not lready been recorded. The newly recognised loans are classified as
Stage 1 for ECL measurement purposes, unless the new loan is deemed to be Purchased or Originated as Credit
Impaired (POCI).
If the modification does not result in cash flows that are substantially different, the modification does not result in
derecognition. Based on the change in cash flows discounted at the original EIR, the Company records a modification
gain or loss, to the extent that an impairment loss has not already been recorded.
Derecognition offirrancial assets other than due to substantial modification
A financial asset (or, where applicable, a part of a financial asset or part of agroup of similar financial assets) is
primarily de-recognised when:
The rights to receive cash flows from the asset have expired, or
" The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the
received cash flows in full without material delay to a third party nder a 'pass-through' arrangement; and
" either (a) the Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has
neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the
asset.

The trarnsferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the
Company has retained.
On derecognition of aFinancial asset in its entirety, the difference between the carrying amount (measured at the date of
derecognition) and the consideration received (including any new asset obtained less any new liability assumed)
recogrised in the Statement of profit and loss.
Equity Instruments
The Company subsequently measures all equity investments other than investment in subsidiaries and associates, Joint
Ventures, at fair value through profit or loss, unless the Company's management has elected to classify irrevocably some
of its equity investments as equity instruments at FVOCI, when such instruments meet the definition of Equity under
Ind AS 32 Financial Instruments: Presentation and are not held for trading. Such classification is deterined on an
instrument-by instrument basis,RAAL & nance
Gains and losses on these equkyy¤nstrumektts pre never recycled to profit or loss. Dividends are &yhised int or
M,NoA
loss as dividend income whef he rightf
197 bpayment has been established, except when the CoparabaitiEfrom
135
XREDACCOJ
AC
Purple Finance Limited
[CIN: U67120MH1993PLCO75037]
Note 1 - Significant accounting policies

such proceeds as a recovery of part of the cost of the instrument, in which case, such gains are recorded in OCI (Other
Comprehensive lncome).Equity instruments at FVOClare not subject to an impairment assessment
Financial liabilities
Financial liabilities, incuding derivatives, which are designated for measurement at FVTPL, are subsequently measured
at fair value. Allother financial liabilities including debt securities and borrowings are measured at amortised cost
using Effective lnterest Rate (EIR) method.

Derecognition
Afinancial liability is derecognised when the obligation under the liability is discharged, cancelled or expires. Where an
existing finanial liability is replaced by another from the same lender on substantially different terms, or the terms of an
existing liability are substantially modified, such an exchange or modification is treated as aderecognition of the original
liability and the recognition of anew liability. The difference between the carrying value of the original financial liability
and the consideration paid is recognised in the Statement of Profit and Loss. As at the reporting date, the Company does
not have any financial liabilities which have been derecognised.

Impairment of financial assets

Overvieww of the ECL Principles
The Company records allowance for expected credit losses for all financial assets other than FVTPL, together with
loan commitments. Equity instruments are not subject to impairment.

The ECL allowance is based on the credit losses expected to arise over the life of the asset (the
lifetime expected credit
loss), unless there has been no significant increase in credit risk since origination, in which case, the allowance is based
on the 12 months expected credit loss. Lifetime ECL are the expected credit losses resulting from all possible default
events over the expected life of a financial instrument. The 12-month ECL is the portion of Lifetime ECL that represent
the ECLs that result from default events on a financial instrument that are possible within the 12 months after the
reporting date.
Both Lifetime ECLS and 12-month ECLs are calculated on either an individual basis or a
collective basis, depending on
the nature of the underlying portfolio of financial instruments. The company has currently grouped all its loan
into a
single portfolio.
The Company has established a policy to perform an assessment, at the end of each reporting period, of whether a
financial instrument's credit risk has increased significantly since initial recognition, by considering the change in the
risk of default occurring over the remaining life of the financial instrument. Based on the
above process, the Company
categorises its loans into Stage 1, Stage 2and Stage 3, as described below:
Stage 1
All exposures where there has not been a significant increase in credit risk since initial recognition or that has low credit
risk at the reporting date and that are not credit impaired upon origination are classified under this stage. Stage 1 loans
also include facilities where the credit risk has improved and the loan has been
reclassified from Stage 2 or Stage 3. The
company records allowance based on twelve months ECL.
Stage 2
All exposures where there has been a significant increase in credit risk since
initial recognition but are not credit
impaired are classified under this stage. The company records allowance for Lifetime ECL.
Stage 3
All exposures assessed as credit impaired when one or more events that have a
detrimental impact on the estimated
future cash flows of that asset have occurred are classified in this stage. The
company recets-attowance for Lifetime
ECL. AVAL& Anance
mits
M. No. Mumbai)
122197

136
Purple Finance Limited
[CIN: U67120MH1993PLCO75037]
Note 1 - Significant accounting policies

The calculation of ECLS

The Company calculates ECLs based on a probalbility-weighted scenarios and historical data to measure the expected
cash shortalls. Acash shorttall is the difference between the cash lows that are due to an entity in accordance with the
contract and the cash flows that the entity expects to receive. BCL. consists of three key components:
Probability of default (PD):
The probability of default (TD) is the likelikood that an obligor will default on its obligations in the future. Adefault
may only happen at a certain time over the assessed period, if the facility has not been previously derecognised and is
still in the portfolio
Exposure At Default ("EAD"):
The amount which the obligor willowe to the Company at the time of default is defined as the exposure at default
(EAD). Exposure at default (EAD) is the sum of outstanding principal and the interest amount accrued but not received
on each loan as at reporting date.
Loss Given Default ("LGD"):
Loss given default estimates the normalised loss which company incurs post customer default. It is computed
through
recovery observed in delinquent accounts over a period of time. It is always expressed as %age of outstanding amount
and not in count. It is based on the difference between contractual cash flows that are due and
expected to be received
including from the collateral if any.

Forward looking information

While estimating the expected credit losses, the Company reviews macro-economic developments occurring in the
economy and the market it operates in. On aperiodic basis, the Company monitors the situation and economic factors
affecting the operations of the company and assesses the requirement of any modification to ECL model.

Provisioning for Trade Receivables and other financial assets at amortized cost:
In addition to the ECL for loans as prescribed above, the Company also holds other
financial assets such as balances with
Bank, trade receivables and other financial assets. The Company recognizes ECL on such assets
based on the historical
loss experience measures (e.g. write off rates / provision g rates) adjusted for expected losses in the
future keeping in
mind the nature of industry and credit ratings of such counter-parties. The amount is currently not
expected to have a
significant impact and the company will periodically assess the same.
Write off:
Loans and debt securities are written off when the Company has no reasonable expectations of recovering the
financial
asset (either in its entirety or a portion of it). Thisis the case when the Company determines that the borrower does not
have assets or sources of income that could generate sufficient cash flows to repay the amounts subject to the
write-off. A
write-off constitutes a derecognition event. Any subsequent recoveries against such loans are credited to the statement of
profit and loss.

4 Fair value mneasurenent

At initial recognition, al1 financial instruments are measured at fair value. For
subsequent measurement, the company
measures certain categories of firnancial instruments at fair value on each balance sheet date.
Fair value is the price that would be received to sell an asset or paid to transfer a
liability in an orderly transaction
between market participants at the measurement date. The fair value measurement is based on the
transaction to sell the asset or transfer the liability takes place either: presumption that the
i. Inthe principal market for the asset or liability, or
ii. In the absence of a principal market, in the most advantageous market for the asset or liability.

The Company uses valuation techniques that are appropriate in the circumstances and for which-sfficient data are
available to measure fair value,ainisuo the use of relevant observable inputs agAABi the use of
unobservable inputs. M. No.
122137 S(Mumbai
miteoy
137
DACOO
PurpleFinance Limited
[CIN: U67120MH1993PLCO75037]
Note 1 - Significant accounting policies

In order to show how fair values have been derived, financial instruments are classified based on a hierarchy of
valuation techniques, as sunmmarised below:

Level 1-Quoted (unadjusted) market prices in active markets for identical assets or liabilities
Level 2 - Valuation techniques for which all inputs which have a significant effect on the recorded fair values are
observable, either directly or indirectly.
Level 3 - Valuation techniques which use inputs that have a significant effect on the recorded fair value that are not
based on observable market data.

For assets and liabilities that are recognized in the financial statements on a recurring basis, the Company determines
whether transfers have occurred between the levels in the hierarchy by re-assessing categorization (based on the lowest
level input that is significant to the fair value measurement as awhole) at the end of each reporting period.

5 Property,plant and equipment (PPE):

An item of property, plant and equipment that qualifies as an asset is measured on initial recognition at cost. Following
initial recognition, items of property, plant and equipment are carried at its cost less accumulated depreciation and
accumulated impairment losses. The total cost of assets comprises its purchase price, freight, duties, taxes and any other
inidental expenses directly attributable to bringing the asset to the location and condition necessary for it to be capable
of operating in the manner intended by the management. Changes in the expected useful life are accounted for by
changing the amortisation period or methodology, as appropriate, and treated as changes in accounting estimates.
Subsequent expenditure related to an item of tangible asset are added to its gross value only if it increases the future
benefits of the existing asset, if it is probable that future economic benefit will flow to the Company from that
expenditure and cost can be measured reliably. Other repairs and maintenance costs are expensed of as and when
incurred.
Depreciation
Depreciation is calculated using the straight-line method to write down the cost of property and equipment to their
residual valuesover their estimated useful lives which is in line with the estimated useful life as specified in Schedule I
of the Companies Act, 2013.
The estimated useful lives are as follows:

Particulars Useful life

estimated
Furniture and Fixtures 10years
Vehicles 8 years
Office Equipment's 5 years
Computers 3 years
The residual values, useful lives and methods of depreciation of property, plant and
equipment are reviewed at each
financial year end and adjusted prospectively, if appropriate. Property, plant and equipment is derecognised on disposal
or whern no future economic benefits are expected from its use. Any gain or loss arising on
derecognition of the asset
(calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is
other income/ expense in the Statenment of Profit and Loss in the year the asset is
recognised in
derecognised. Depreciation on assets
acquired/sold during the year is recognised on a pro rata basis to the Statement of Profit and Loss from/ upto the date of
acquisition/ sale. The date of disposal of an item of property, plant and equipment is the date the recipient obtains
control of that item in accordance with the requirements for determining when a performance
Ind AS 115.
obligation is satisfied in
aAAL &A9 Anance
M.No.
122197 (Nunmbai
aite

ccC 138
RTERED A
Purple Finance Limited
[CIN: U67120MH1993PLCO75037]
Note 1 - Significant accounting policies

6 Intangible assets:
An intangible asset is recognised only when its cost can be measured reliably and it is probable that the expected future
economic benefits that are attributable to it will flow to the Company.
Intangible assets acquired separately are measured on initial recognition at cost. The cost of an intangible asset
comprises its purchase price arnd any directly attributable expenditure on making the asset ready for its intended use
and net of any trade discounts and rebates. Following initial recognition, intangible assets are carried at cost less any
accumulated amortisation and any accumulated impairment losses.
The useful lives of intangible assets are assessed to be either finite or indefinite. Intangible assets with finite lives are
amortised on a straight line basis over the useful economic life. The estimated useful life of intangible assets is
mentioned below:
Useful life
Particulars
estimated
License fees 10 years
Computer softwares 3 years

The amortization period and the amortization method for an intangible asset with finite useful life is reviewed at the end
of each financial year. If any of these expectations differ from previous estimates, such change is accounted for as a
change in an accounting estimate. Amortisation on assets acquired/sold during the year is recognised on a pro-rata basis
to the Statement of Profit and Loss from/ upto the date of acquisition/ sale.

Goodwill is not subject to amortisation and is tested annually for impairment. Goodwill is carried at cost less
accumulated impairment losses. An intangible asset is derecognised on disposal, or when no future economic benefits
are expected from use or disposal. Gains or losses arising from derecognition of an intangible asset are recognised in
profit or loss when the asset is derecognised.

7 Impairment of non-financial assets, wherever applicable

As at the end of each accounting year, the Company reviews the carrying amounts of its PPE and intangible assets to
determine whether there is any indication that those assets have suffered an impairment loss. If such indication exists,
the PPE and intangible assets are tested for impairment so as to determine the impairment loss, if any. Goodwill and the
intangible assets with indefinite life are tested for impairment each year. Impairment loss is recognised when the
carrying amount of an asset exceeds its recoverable amount. Recoverable amount is determined:
a) in the case of an individual asset, at the higher of the net selling price and the value in use; and
b) in the case of a cash generating unit (the smallest identifiable group of assets that generates
independent cash flows),
at the higher of the cash generating unit's net selling price and the value in use.

Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the
estimated future cash flows are discounted to their present value using a pre-tax discount rate that
reflects current
market assessments of the time value of money and the risks specific to the asset for which the estimates of
future cash
flows have not been adjusted. If recoverable amount of an asset (or cash generating unit) is estimated to be less than its
carrying amount, such deficit is recognised immediately in the Statement of Profit and Loss as impairment loss and the
carrying amount of the asset (or cash generating unit) is reduced to its recoverable amount. For this
purpose, the
impairment loss recognised in respect of a cash generating unit is allocated first to reduce the carrying amount of any
goodwill allocated to such cash generating unit and then to reduce the carrying amount of the other
assets of the cash
generating unit on a pro-rata basis.

When an impairment loss subsequently reverses, the carrying amount of the asset (or cash generating unit), except for
allocated goodwill, nere4sec'to the revised estimate of its recoverable amount, but so that thejEASA rrying
amount does not eked the Hg amount that would have been deternmined had no impairmengsiS recogisad for
carý
122197

RADACcO
139 Mumbai
Purple Finance Limited
[CIN: U67120MH1993PLCO75037]
Note 1 - Significant accounting policies

the asset (or cash generating unit) in prior years. A reversal of an impairment loss (other than impairmernt loss allocated
to goodwill) is recognised immediately in the Statement of Profit and Loss.

Revenue recognition:
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the
revenue can be reliably measured and there exists reasonable certainty of its recovery. Revenue is measured at the fair
value of the consideration received or receivable as reduced for estimated customer credits and other similar allowances.

(I) Interest income:

Interest income is recognised by applying the effective Interest Rate (EIR) to the gross carrying amount of financial assets
measured at amortised cost other than credit-impaired assets and financial assets classified as measured at FVTPL. The
'effective interest rate' is the rate that exactly discounts estimated future cash payments or receipts through the expected
lte of the financial instrument to the gross carrying amount of a financial asset. The EIR is calculated by taking into
account the fees and costs that are an integral part of the EIR.

Any subsequent changes in the estimation of the future cash flows is recognised in interest income with the
corresponding adjustment to the carrying amount of the assets. Interest income on credit impaired assets is recognised
by applying the effective interest rate to the net amortised cost (net of ECL provision) of the financial asset.
Interest on delayed payments by customers are treated to accrue only on realisation, due to uncertainty of realisation
and are accounted accordingly.

(II) Fees & Commission Income

Fees and commissions are recognised at point in time when the Company satisfies the performance obligation, at the
amount of transaction price (net of variable consideration) allocated to that performance obligation based on a five-step
model as set out below, unless included in the effective interest calculation:
Step 1: Identify contract(s) with a customer: A contract is defined as an agreement between two or more parties that
creates enforceable rights and obligations and sets out the criteria for every contract that must be met.
Step 2: Identify performance obligations in the contract: A performance obligation is a promise in a contract with a
customer to transfer a good or service to the customer.
Step 3: Determine the transaction price: The transaction price is the amount of consideration to which the Company
expects to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts
collected on behalf of third parties.
Step 4: Allocate the transaction price to the performance obligations in the contract: For a contract that has more than
one performance obligation, the Company allocates the transaction price to each performance obligation in an
amount
that depicts the amount of consideration to which the Company expects to be entitled in exchange for
satisfying each
performance obligation.
Step 5: Recognise revenue when (or as) the Company satisfies a performance obligation.

(III) Other Operational revenue

Other operational revenue represents income earned from the activities incidental to the business and is recognised
when the right to receive the income is established as per the terms of the contract.

(IV) Dividend income:

Dividend income is recognised when the Company'sright to receive the payment is established and it is probable that
the economic benefits associated with the dividend will flow to the entity and the amount of the drvtcerd can be
Anance
measured reliably.
&ASSOC
N. No.
122197 nited
Munbai
140
ARTERE )ACCU
Purple Finance Limited
[CIN: U67120MH1993PLC075037]
Note 1- Significant accounting policies

(V) Net gain or fair value change:

Anydifferences between the fair values of financial assets classified as fair value through the profit or loss held by the
Company on the balance sheet date is recognised as an unrealised gain/loss. In cases there is a net gain in the aggregate,
the same is recognised in 'Net gains on fair value changes' under Revenue from operations and if there is a net loss the
same is disclosed under 'Expenses' in the Statement of Profit and Loss.

Similarly, any realised gain or loss on sale of financial instruments measured at FVPTL and debt or equity instruments
measured at FVOCI (if any) is recognised in net gain / loss on fair value changes.

9 Borrowing costs:
Borrowing costs incdude interest expense calculated using the effective interest method. Borrowing costs net of any
investment income from the temporary investment of related borrowings, that are attributable to the
acquisition,
construction or production of a qualifying asset are capitalised as part of cost of such asset till such time the
asset is
ready for its intended use or sale. A qualifying asset is an asset that necessarily
requires a substantial period of time to
get ready for its intended use or sale. All other borrowing costs are
recognised in profit or loss in the period in which
they are incurred.

10 Retirement and other employee benefit:

Short term employee benefits
All employee benefits payable wholly within twelve
months of rendering the service are classified as short-term
employee benefits. The undiscounted amount of short-term employee
benefits expected to be paid in exchange for the
services rendered by employees is recognised as an expense during the
and the expected cost of the bonus/ex-gratia are period. Benefits such as salaries and wages, etc.
service.
recognised in the period in which the employee renders the
related

Post - employment employee benefits

a. Defined Contribution Schemes
All the employees of the Company are
entitled to receive benefits under the provident Fund and
Insurance scheme, defined contribution plans in which both the employee and the Company employees State
stipulated rate. The Company has no liability for future contribute
benefits other than its annual contribution and monthly
at a
contributions as an expense in the period in which employee recognises
renders the related service. If the contribution
such
the scheme for service received before the payable to
to the scheme is recognised as a
Balance Sheet date exceeds the contribution already paid, the
liability after deducting the contribution already paid. If deficit payable
exceeds the contribution due for services received the contribution already paid
before the Balance Sheet date,
the extent that the
pre-payment will lead to, for example, a reduction in future then excess is recognised as an asset to
payment or a cash refund.
b. Defined Benefit Schemes
The Company provides for the gratuity, a
lump sum payments to employees upon death defined benefit retirement plan covering all
the stipulated years while in employment or on separation from employees. The plan provides for
mentioned under The Payment of Gratuity Act, 1972.
such defined benefit plan is
employment after serving for
The present value of the
determined based on actuarial valuation, carried out by obligation under
Balance Sheet date, using the Projected Unit an independent
actuary at each
The obligation is measured at the Credit Method.
present
arising from experience adjustments and value of the estimated future cash flows. Remeasurement gains and
comprehensive income i theperiod in whichchanges they
in actuarial
assumptions are recognized directly in the losses other
changes in equity andhe balance,sheet. occur. They are included in retained
subsequent periods. Remeasurements are not reclassified to the earnings pie
in the atenRtof
M.No.
122197
statement of profian@tessi
Mbai
ARTSRFO 141
Purple Finance Limited
[CIN: U67120MH1993PLC075037]
Note 1- Significant accounting policies

The Company recognises the following changes in the net defined benefit obligation as an expense in the statement of
profit and loss:
" Service costs comprising current service costs, past service costs, gains and losses on curtailments and non-routine
settlements; and
" Net interest expense or income

c Employee Stock Options

Eligible employees in terms of the Employees Stock Options Scheme of the Company receive remuneration in the form
of share-based payments, whereby employees render services as consideration for equity instruments (equity-settled
transactions).
The cost of equity-settled transactions is determined by the fair value at the date when the grant is made using an
appropriate valuation model.
That cost is recognised, together with a corresponding increase in Share Option Outstanding Reserves in equity, over the
period in which the performance and / or service conditions are fulfilled i.e. over the vesting period. The cumulative
expense recognised for equity-settled transactions at each reporting date until the vesting date reflects the extent to
which the vesting period has expired and the Company's best estimate of the number of equity instruments that will
ultimately vest.
The Statement of Profit and Loss expense or credit for a period represents the movement in cumulative expense
recognised as at the beginning and end of that period and is recognised in employee benefits expense. No expense is
recognised for awards that do not ultimately vest.

inan,

unbai)
ito

122197

DACCO

142
Purple Finance Limited
[CIN: U67120MH1993PLCO75037|
Note 1 - Significant accounting policies
11 Leases:
The Company as a lessee
The Company mainly has lease arrangements for land and buildings for offices.
The Company assesses whether a contract is or contains a lease, at inception of a contract. Acontract is, or contains, a
lease, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for
consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company
assesses whether :
(i) the contract involves the use of an identified asset,
() the Company has substantially all the economic benefits from the use of the asset through the period of the lease, and
(iii) the Company has the right to direct the use of the asset.
At the date of commencement of the lease, the Company recognises aright-to-use asset and acorresponding lease
liability for all lease arrangements in which it is a lessee, except for leases with a term of twelve months or less (short
term leases) and low value leases.
The ROUasset is initially recognized at cost, which comprises the initial amount of the lease liability adjusted for any
lease payments made at or before the commencement date, plus any initial direct costs incurred, less any lease
incentives. They are subsequently measured at cost less accumulated depreciation and impairment losses. Certain lease
arrangements indude the options to extend or terminate the lease before the end of the lease term. ROU assets and lease
liabilities includes these options when it is reasonably certain that they will be exercised.
The ROU asset is depreciated using the straight-line method from the commencement date to the earlier of, the end of
the useful life of the ROU asset or the end of the lease term. The estimated useful lives of ROU assets are determined on
the same basis as those of property and equipment. In addition, the right-of-use asset is periodically reduced by
impairment losses, if any, and adjusted for certain re-measurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement
date, discounted using the Company's incremerntal borrowing rate. After the commencement date, the amount of lease
liabilities is increased to reflect the accretion of interest and reduced for the lease payments made and remeasured (with
a corresponding adjustment to the related ROU asset) when there is a change in future lease payments in case of
renegotiation, changes of an index or rate or in case of reassessment of options.

The company has applied the exemptions under IND AS 101 for First Time Adoption of Ind AS. Accordingly the
company, has used a single discount rate for lease with similar characteristics and measured a lease liability at the date
of transition at present value of remaining lease payments using the incremental borrowing rate (discount rate) as at the
date of transition. Right of use assets is measured at an amount equal to lease liability at transition date.

Short term leases and leases of low-value assets

The Company has elected not to recognize ROU assets and lease liabilities for short term leases as well as low value
assets and recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease
term.

Further under the exemption under IND AS101, the company has elected not to apply Ind AS116 to leases for whichthe
nance
lease term ends within 12 months of the transition date ie, 1stApril 2022.
The lease payments avpensed'eut as per lease term in the statement of Profit and Loss. bai

M.No.
ed
122197
12 Taxation:
Current tax
Current tax assets and for the current and prior years are measured at the amount expected to be recovered
from, or paid to, the taxation authorities. The tax rates and tax laws used to compute the amount are those that are
enacted, or substantively enacted, by the reporting date in the countries where the Company operates and generates
taxable income.
Current income tax relating to items recognised outside the Statement of Profit and Loss is recognised outside the
143 income or in equity). Management periodically evaluates
Statement of Profit and Loss (either in other comprehensive
Purple Finance Limited
ICIN: U67120MH1993PLC075037|
Note 1- Significant accounting policies

positions taken in the tax returns with respect to siluations in which applicable tax regulations are subject to
interpretation and establishes provisions where appropriate.
Deferred Tax
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the
Company's financial statements and the corresponding tax bases used in computation of taxable profit.
Deterred tax liabilities are generally recognized for all taxable temporary differences. However, in case of temporary
ditferences that arise fronn iinitial recognition of assets or liabilities in atransaction affect neither the taxable profit nor the
accounting protit, deterred tax liabilities are not recognized.

Deterred tax assets are generally recognized for all deductible temporary differences to the extent it is probable that
taxable profits will be available against which those deductible temnporary difference can be utilized. In case of
temporary differences that arise from initial recognition of assets or liabilities in a transaction that affect neither the
taxable profit nor the accounting profit, deferred tax assets are not recognized. The carrying amount of deferred tax
assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that
sufficient taxable profits will be available to allow the benefits of part or all of such deferred tax assets to be utilized.

Deferred tax assets and liabilities are measured at the tax rates that have been enacted or substantively enacted by the
Balance Sheet date and are expected to apply to taxable income in the years in which those temporary differences are
expected to be recovered or settled.

Presentation of current and deferred tax

Current and deferred tax are recognized as income or an expense in the Statement of Profit and Loss, except when they
relate to items that are recognized in Other Comprehensive Income, in which case, the current and deferred tax
income/expense are recognized in Other Comprehensive Income.
The Company offsets current tax assets and current tax liabilities, where it has a legally enforceable right to set off the
recognized amounts and where it intends either to settle on a net basis, or to realize the asset and settle the liability
simultaneously.In case of deferred tax assets and deferred tax liabilities, the same are offset if the Company has a legally
enforceable right to set off corresponding current tax assets against current tax liabilities and the deferred tax assets and
deferred tax liabilities relate to income taxes levied by the same tax authority on the Company.

13 Foreign currency translation

The standalone financial statements are presented in Indian Rupees which is also functional currency of the Company
and the currency of the primary economic environment in which the Company operates
Transaction and balances
(i) Initial recognition
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates
of the transactions.

(ii) Conversion
Monetary assets and liabilities denomínated in foreign currency, which are outstanding as at the reporting date, are
translated at the reporting date at the closing exchange rate and the resultant exchange differences are recognised in the
Statement of profit and Loss.
Non-monetary items that are measured at historical cost in a foreign currency are translated using the spot exchange
rates as at the date of recognition.

14 Provisions, contingablttieg and contingent assets:

Provisions are recfgizedNO
whèí the Company has a present obligation (legal or constructive) as aesarpt event,
it is probable that a outhayi of tsources embodying economic benefits will be required to sefethe obligatíanpnd a
144
ARTERED ACCO
Purple Finance Limited
ICIN: U67120MH1993PLCO750371
Note 1 - Significant accounting policies

reliable estimate can be made of the amount of the obligation. The expense relating to a provision is presented in the
statement of profit and loss. Provisions are not discounted to their present value and are determined based on the best
estimate required tosettle the obligation at the reporting date. These estimates are reviewed at each reporting date and
adjusted to reflect the current best estimate

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the
occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present
obligation that is not recognised because it is not probable that an outflow of resources will be required to settle the
obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognised
because it cannot be measured reliably. The Company does not recognise a contingent liability but discloses its existence
in the financial statements.Contingent liabilities are reviewed at each Balance Sheet date.
Contingent assets are disclosed where an inflow of economic benefits is probable.

15 Statement of cash flows:

Cash flows are reported under the 'Indirect method as set out in Ind AS7 on 'Statement of Cash Flows, whereby net
profit after tax is adjusted for the effects of transactions of non-cash nature, tax and any deferrals or accruals of past or
future cash receipts or payments. The cash flows are prepared for the operating, investing and financing activities of the
Company
16 Cash and bank balances:
Cash and cash equivalents comprise cash at bank and on hand, short term deposits and highly liquid investments with
an original maturity of three months or less, which are readily convertible in cash and subject to insignificant risk of
change in value. Bank overdrafts are shown within borrowings in current liabilities in the balance sheet.

17 Earnings per share:

The Company reports basic and diluted earnings per share in accordance with Ind AS 33 on Earnings per share. Basic
EPS is calculated by dividing the net profit or loss for the year attributable to equity shareholders by the weighted
average number of equity shares outstanding during the year.
For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity
shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all
dilutive potential equity shares.
Dilutive potential equity shares are deemed converted as of the beginning of the period, unless they have been issued at
a later date. In computing the dilutive earnings per share, only potential equity shares that are dilutive and that either
reduces the earnings per share or increases loss per share are included.

18 Business Combination:

The Company applies the acquisition method of accounting for business combinations where common control does not
exist. The consideration transferred by the Company for the acquisition of business comprises of fair value of the assets
transferred, liabilities incurred, and the equity interests issued by the Company as at the acquisition date i.e. the date on
which it obtains the control of the acquire. The acquisition related costs are recognised in the statement of profit and loss
as incurred,except to the extent related to the issue of debt or equity securities.

Identifiable assets acquired and liabilities assumed in a business combination are measured initially at their fairvalues
on the acquisition date.
Goodwill is initially measured at cost, being the excess of the consideration transferred over the fair value of the net
identifiable assets initial recognition,Goodwill is tested annually for impairment and anyipairyent
aASStotoment
loss for Goodwillis,
Further details angipat othis
the of profit and loss.
Aniteo
ierger on financial statements of the Company is disclosed in note 4 7 , h o i
1221
145
RIERED
Purple Finance Limited
[CIN: U67120MH1993PLCO75037]
Note 1 - Significant accounting policies

(C) Significant Accounting Judgements, Estimates and Assumptions

The preparation of financial statemernts in conformity with the Ind AS reguires the management to make judgments,
estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the
accompanying disclosure and the disclosure of contingent liabilities, at the end of the reporting period. Estimates and
underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the
period in which the estimates are revised and future periods are affected. Although these estimates are based on the
management's best knowledge of current events and actions,uncertainty about these assumptions and estimates could
result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods in
which changes are made and, if material, their effects are disclosed in the notes to the financial statements.

In particular, information about significant areas of estimation, uncertainty and critical judgments in applying
accounting policies that have the most significant effect on the amounts recognised in the financial statements is
included in the following notes:
i) Business Model Assessment

Classification and measurement of financial assets depends on the results of the Solely for Payment of Principal and
Interest and the business model test. The Company determines the business model at a level that reflects how groups of
financial assets are managed together to achieve a particular business objective. This assessment includes judgement
used by the company in determining the business model including how the performance of the assets is evaluated and
their performance measured, the risks that affect the performance of the assets and how these are managed. The
Company monitors financial assets that are derecognised prior to their maturity to understand the reason for their
disposal and whether the reasons are consistent with the objective of the business for which the asset was held.

ii)) Defined employee benefit assets and liabilities

The cost of the defined benefit gratuity plan and the present value of the gratuity obligation are determined using
actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual
developments in the future. These include the determination of the discount rate; future salary increases and mortality
rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly
sensitive to changes in these assumptions. Al assumptions are reviewed annually.
ii) Fair value measurement
When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based
on quoted prices in active markets, their fair value is measured using various valuation techniques. The inputs to these
models are taken from observable markets where possible, but where this is not feasible, a degree of judgment is
required in establishing fair values.
Judgments include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions
about these factors could affect the reported fair value of financial instruments.

iv) Impairment of loans portfolio

The measurement of impairment losses across all categories of financial assets requires judgement, in particular, the
estimation of the amount and timing of future cash flows and collateral values when determining impairment losses and
the assessment of a significant increase in credit risk. These estimates are driven by a number of factors, changes in
which can result in different levels of allowances.

v) Provisions
The timing of recognition and quantification of the liability (including litigations) requires the application of judgement
to existing facts and circumstances, which can be subject to change. The carrying amounts of provisions and liabilities
are reviewed regularly and revised to take account of changing facts and circumstances.

vi) Effective Interest Rate (EJB nethod mance

The effective interest ratshe rate at gliscounts estimated future cash payments or receipts throshe expectdlife
of the financial asset or
nciahil tslaetisedses hefore
ito the grOSS carrying amount of a financial asset (i.e. . itsl!
146
ARTE A
RTERED
Purple inance Limited
[CIN: U67120MH1993PLC075037]
Note 1 - Significant accounting policies

any impairment allowance) or to the amortised cost of a financial liability. This estimation, by nature, requires an
element of judgement regarding the expected behaviour and life- cycle of the instruments and other fee income / expense
that are integral parts of the instrument.
vii) Right-of-Use Assets and Lease Liability
The Company has exercised judgement in determining the lease term as the non - cancellable term of the lease, together
with the impact of options to extend or terminate the lease if it is reasonably certain to be exercised. Where the rate
implicit in the lease is not readily available, an incremental borrowing rate is applied. This incremental borrowing rate
reflects the rate of interest that the lessee would have to pay to borrow over a similar term, with a similar security, the
funds necessary to obtain an asset of a similar nature & value to the right of use asset in a similar economic
environment. Determination of the incremental borrowing rate requires estimation.
viii) Income taxes
Judgment of the Management is required for the calculation of provision for income taxes and deferred tax assets and
liabilities. The company reviews at each balance sheet date the carrying amount of deferred tax assets. The factors used
in estimates may difer from the actual outcome which could lead to significant adjustment to the amounts reported in
the financial statements.

AL& ASS Mun.bai

M.No.
122197

ACCO

TEREDA

147
148
149
CA
91 22 2893 5855
Jogin Raval & Associates joginravalcalagmail.com
Chartered Accountants 9 www.joginravalca.com

LIMUED REVIEW RErORT ON QUARTER ENDED UN-AUDITED PINANCIA. RESULTS

T.
1he Ran of Dietors
Ihunle Finane Ltd
Mumbai

1 Wehave reviewed the accompanying statement of unaudited financial results of Purple Finance Limited ('the Company)
for the quarter ended June 30, 2024 (the Statement) attached herewith, being subrnitted by the Cornparny pursuant to the
requirenents of Regulation 33 of the Securities and Exchange Board of India (Listing Obligations and Disclosure
Requirements) Regulations, 2015, as amended ('he Regulations').
2 This Statement, which is the responsibility of the Company's Management and approved by the Company's Board of
Directors, has been prepared in acordance with the recognition and measurement principles laid down in Indian
Acounting Standard 34 'InterimFinancial Reporting' (Ind AS 34'), prescribed under Section 133 of the Companies Act,
2013 ("the Act') read with relevant rules issued thereunder and in compliance with the Regulations and directions issued
by the Reserve Bank of India ("the RBI") from time to time, applicable to NBFC ("the RBI guidelines"), the listing
regulations and other recognized accounting principles generally accepted in India. Our responsibility is to express a
conclusion on the Statement based on our review.

3 We conducted our review of the Statement in accordance with the Standard on Review Engagement (SRE) 2410, "Review
of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Institute of Chartered
Accountants of India. This standard requires that we plan and perform the review to obtain moderate assurance as to
whether the Statement is free of material misstatement. A review consists of making inquiries, primarily of persons
responsible for financial and accounting matters, and applying analytical and other review procedures. A review is
substantially less in scope than an audit conducted in accordance with Standards on Auditing and consequently does not
enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit.
Accordingly, we do not express an audit opinion.
4 Based on our review conducted as stated in above, nothing has come to our attention that causes us to believe that the
accompanying Statement of unaudited financial results prepared in accordance with the recognition and measurement
principles laid down in Ind AS 34, prescribed under Section 133 of the Act read with relevant rules issued thereunder
and other recognized accounting principles generally accepted in India has not disclosed the information required to be
disclosed in terms of the Regulations including the manner which it is to be disclosed, or that it contains any material
misstatement.

For Jogin Raval & Associates

Chartered Accountants
ICAKsFirg
RAVA
Registrationnumber: 128586W

M. No.
122197
JoginkK Raval
Membership Number: 122197
Place: Mumbai
Date: 29th July, 2024
UDIN: 24122197BKAOQT4518

150 Nutan Nagar, Borivali West, Mumbai - 400 092.

B-101/102, Shree Sai Tower CHS Ltd., Sodawala Lane,
+91 98209 77870 admin@joginravalca.com
 OTHER FINANCIAL INFORMATION

The following tables present certain accounting and other ratios compared on the basis of amounts derived from
the Restated Financial Statements and Unaudited Financial Results. For details, see "Financial Statements" on
page 102 of this Letter of Offer.

Particulars June 30, March 31, March 31, March 31,

2024 2024 2023 2022
Basics Earnings / (loss) per share (in ₹) -1.26 -2.27 -2.31 -14.06
Diluted Earnings / (loss) per share (in ₹) -1.26 -2.27 -2.31 -14.06
Return on Net worth -9.56% -15.75% -36.58% -45.98%
Net asset value per Equity share (in ₹) 13.16 14.38 7.51 7.80
EBITDA (₹ in Lakhs) -292.33 -1,104.26 -540.71 -731.70

Below are the reconciliations to non-GAAP measures presented in this Letter of Offer:

1) Reconciliation of Net Worth

(₹ in Lakhs)
Particulars June 30, March 31, March 31, March 31,
2024 2024 2023 2022
Equity Share Capital (A) 3,361.50 3,361.50 2,302.20 2,053.86
Other Equity (B) 1,061.23 1,471.46 -572.55 -451.72
Networth (C=A+B) 4,422.73 4,832.96 1,729.65 1,602.14

2) Reconciliation of return on net worth

(₹ in Lakhs)
Particulars June 30, March 31, March 31, March 31,
2024 2024 2023 2022
Profit / (loss) for the period / -422.65 -761.38 -632.78 -736.74
year (A)
Equity Share Capital (B) 3,361.50 3,361.50 2,302.20 2,053.86
Other Equity (C) 1,061.23 1,471.46 -572.55 -451.72
Return on Networth (%) (D= -9.56% -15.75% -36.58% -45.98%
A/(B+C))

3) Reconciliation of net asset value per Equity Share

(₹ in Lakhs)
Particulars June 30, March 31, March 31, March 31,
2024 2024 2023 2022
Equity Share Capital (A) 3,361.50 3,361.50 2,302.20 2,053.86
Other Equity (B) 1,061.23 1,471.46 -572.55 -451.72
Number of Equity shares 3,36,14,954 3,36,14,954 2,30,21,953 2,05,38,619
outstanding at the period / year
end (C) (Numbers)
Net Asset Value per Equity 13.16 14.38 7.51 7.80
Share (E= (A+B)/C

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4) Reconciliation of the Profit / (loss) for the period / year to EBITDA
(₹ in Lakhs)
Particulars June 30, March 31, March 31, March 31,
2024 2024 2023 2022
Profit / (loss) for the period / year -422.65 -761.38 -632.78 -736.74
(A)
Total tax expense + other 7.99 -564.67 10.13 -14.66
comprehensive Income (B)
Finance costs (C) 87.25 104.11 15.05 5.00
Depreciation and amortization 35.08 117.69 66.90 14.69
expense (D)
EBITDA (E=A+B+C+D) -292.33 -1,104.26 -540.71 -731.70

Notes to Accounting Ratios:

a. Basic and diluted earnings/ (loss) per equity share: Basic and diluted earnings/ (loss) per equity share are
computed in accordance with Indian Accounting Standard 33 notified under the Companies (Indian
Accounting Standards) Rules of 2015 (as amended).

b. Return on Net worth Ratio: Restated profit / (loss) for the year of the Company divided by Net Worth of
the Company at the end of the year.

c. Net Asset Value is the Net Worth of the Company.

d. Net asset value per equity share is calculated by dividing Net Worth by the number of Equity Shares
outstanding as at the end of the period/year.

e. EBITDA is calculated as restated profit for the year plus total tax expenses, depreciation expenses,
finance costs and exceptional items.

f. "Net Worth" means the aggregate value of the paid-up share capital and other equity.

g. Figures and Ratios for the period June 30, 2024 have not been annualized.

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[

CAPITALISATION STATEMENT

The following table sets forth the capitalisation statement as of March 31, 2024, on the basis of our Restated
Financial Information and financial records as derived from the books of accounts, and as adjusted for the Issue.
This table should be read in conjunction with "Risk Factors", "Financial Information" and "Management’s
Discussion and Analysis of Financial Condition and Results of Operations", on pages 22,102 and 154,
respectively.

Statement of Capitalization
(₹ in lakhs)
Particulars* Pre-Issue As adjusted
as at for the issue
31st March (Post Issue)*
2024
Borrowings:
Current borrowings A 409.78 409.78
Non-current borrowings B 1,803.04 1,803.04
Total borrowings C=A+B 2,212.82 2,212.82
Shareholder's fund (Net worth)
Share Capital D 3,361.50 4,481.99
Other Equity E 1,471.46 4,832.96
Total shareholder's fund (Net worth) F=D+E 4,832.96 9,314.95
Non-current borrowing's/shareholder's fund (Net worth) B/F 8.48% 19.36%
ratio
Total borrowings /shareholders’ funds (Net worth) ratio C/F 45.79% 23.76%
*To be updated in the Letter of Offer

Notes:

1. Non-current borrowings are considered as borrowings other than short term borrowings and include
current maturities of long-term borrowings from related parties.

2. The Current borrowings are considered as borrowings which are repayable on demand and Cash Credits
from banks.

3. The amounts disclosed above are based on the Restated Financial Statements of the Company.

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 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND RESULTS OF
OPERATONS

ANNEXURE – I

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

FORWARD LOOKING STATEMENTS:

Statements in this Management Discussion and Analysis of Financial Condition and Results of Operations of the
Company describing the Company’s objectives, expectations or predictions may be forward looking within the
meaning of applicable securities laws and regulations. Forward looking statements are based on certain
assumptions and expectations of future events. The Company cannot guarantee that these assumptions and
expectations are accurate or will be realized. The Company assumes no responsibility to publicly amend, modify
or revise forward – looking statements, on the basis of any subsequent developments, information, or events.
Actual results may differ materially from those expressed in the statement. Important factors that could influence
the Company’s operations include determination of tariff and such other charges and levies by the regulatory
authority, changes in government regulations, tax laws, economic developments within the country and other
factors affecting the operations of the business of the company.

The Financial Statements are prepared under historical cost convention, on accrual basis of accounting and in
accordance with the provisions of the Companies Act, 2013 (the “Act”) and comply with the Accounting
Standards notified under section 133 of the Act and SEBI guidelines. The Management of Purple Finance Limited
(“PFL”) has used estimates and judgments relating to the financial statements on a prudent and reasonable
basis, to reflect the true and fair view of the state of the affairs of the company and profit for the year.

The following discussion on our financial conditions and results of operations should be read together with our
restated financial statement and the notes to these statements which are part of the Annual report.

Unless otherwise stated or the context otherwise require, all reference herein to “we”, “us”, “our”, “your”, “the
Company”, “PFL” or “Purple Finance” are to be taken as “Purple Finance Limited”.

Business Overview

Purple Finance Limited was originally incorporated as a Private Limited Company under the name of “Devipura
Balaji Securities & Investments Private Limited” under the provisions of the Companies Act, 1956 on November
09, 1993 issued by the Registrar of Companies, Mumbai, Maharashtra. The Company was subsequently converted
into Public Limited Company as “Devipura Balaji Securities & Investments Limited” vide fresh Certificate of
Incorporation dated July 20, 1998. The Company was registered under section 45-IA of The Reserve Bank of
India Act, 1934 and received the certificate of registration from Reserve Bank of India ("RBI") dated July 20,
1999, having Registration no. 13.01268 to commence/ carry on the business of non-banking financial institution
without accepting deposits. Our Company is registered with RBI as a Base Layer Non-Systemically Important
Non-Deposit taking Non-Banking Finance Company (NBFC-ND-ICC). Devipura Balaji Securities &
Investments Limited acquired K K Financial Services Private Limited on September 13, 2013. Pursuant to the
aforesaid acquisition, the Company applied for name change to Registrar of Companies, Mumbai and received a
Certificate of Registration approving change in name to ‘Purple Finance Limited’ vide Certificate of Incorporation
dated November 26, 2013.

Further, the Hon’ble NCLT, Mumbai Bench on February 15, 2024 has approved the Scheme of Merger by
Absorption of Canopy Finance Limited by Purple Finance Limited. Pursuant to the merger of the Company with
CFL, the equity shares of the Company have been listed on BSE w.e.f. June 14, 2024 and on CSE w.e.f. June 18,
2024.

Overview of our Company Operations

PFL ventured into retail MSME secured lending in October 2022 and operates in tier II, III & tier IV cities,
offering loans to micro and small entrepreneurs in a ticket size between ₹3 lakh to ₹30 lakh. PFL leverages
technology to make its processes more efficient. It has built a robust tech platform for underwriting that enables

| 154 |
seamless and paperless loan approvals. PFL has opened 25 branches has empowered more than 2000 lives through
best of technology adoption and giving them access to affordable, adequate and timely credit. In an era where
MSMEs are the backbone of Indian economy, PFL’s role as a lending Company has never been more critical.
PFL has not only provided financial support but also served as a guiding force for several small entrepreneurs,
helping them turn their dreams into thriving businesses. PFL intends to become a new age digital NBFC inter-
alia currently engaged in the business of offering small size secured business loans across India predominantly in
tier II, III & tier IV cities. PFL with its superior technology platform aspires to simplify the existing processes in
the mortgages segment and is confident of making a difference to the MSME borrowers with simplified funding
options and timely loan disbursements.

Significant Factors Affecting our Results of Operations and Financial Conditions

We believe that the following factors may have significant impact our results of operations and financial condition
during the periods under review and may continue to affect our results of operations and financial condition in
the future.

1. Credit Risk: Purple Finance Limited faces the risk of loss resulting from borrowers or counterparties
failing to meet their financial or contractual obligations. This could be due to various factors such as
insolvency, default, inability to repay loans or deterioration of external environment.

2. Operational Risk: The Company is exposed to the risk of loss due to internal factors such as human error,
inadequate processes or controls, or system failures. This includes reliance on the accuracy of
information provided by customers and third-party service providers, which may affect creditworthiness
assessments and the valuation of collateral. Any failure or significant weakness of our internal processes
or systems could cause operational errors or incidents of fraud, which would adversely affect our
business, profitability and reputation.

3. Asset Quality Risk: Higher levels of Non-Performing Assets (NPAs) can adversely impact the quality of
Purple Finance's loan portfolio. Inability to effectively manage NPAs could lead to financial losses and
negatively affect the company's business operations and profitability.

4. Capital Risk: Purple Finance requires substantial capital to operate its business. Any disruption in its
sources of capital could have adverse effects on its business, results of operations, and financial
condition. This includes challenges in raising adequate funds for lending activities and meeting
regulatory capital requirements.

5. Interest Rate Risk: As an NBFC, Purple Finance is particularly vulnerable to interest rate risk. Volatility
in interest rates could impact its net interest income and margin, affecting overall profitability and cash
flows. This risk arises from both lending and treasury operations and could have an adverse effect on
our net interest income and net interest margin, thereby affecting our results of operations and cash flows.

6. Liquidity Risk: The Company is exposed to liquidity risk principally because of lending and investment
for periods which may differ from those of its funding sources. In case of overall economic growth being
muted, Purple Finance Limited may face challenge for fresh funding from Banks and Mutual Funds. In
such an event, Purple Finance Limited may face refinancing challenges.

7. Periodic inspections Risk: As an NBFC, we are subject to periodic inspections by the RBI. Non-
compliance with regulatory compliances and observations made by the RBI during these inspections
could expose us to penalties and restrictions.

8. Fraud Risk: Your Company is exposed to fraud risk because of possible frauds perpetuated by customers,
employees, vendors etc. The company has a detailed fraud check procedure while on boarding
employees, vendors and customers etc.

9. Regulatory Risk: As an entity in the financial services sector, the Company is subject to regulations by
Indian governmental authorities, including the Reserve Bank of India. Their laws and regulations impose
numerous requirements on the Company, including asset classification and prescribed levels of capital
adequacy, solvency requirements and liquid assets. There may be future changes in the regulatory system

| 155 |
 or in the enforcement of the laws and regulations that could adversely affect the Company’s performance.

10. Macro-economic Risk: Any unfavorable economic conditions, unstable political environment and
changes in Government policies could impact the growth of the company. Any slowdown in the Indian
economy and in particular the financing business could adversely affect the Company’s business. Also
increase in competition in MSME funding and competitors taking aggressive posture can have impact
on the business of the company.

Significant Accounting Policies

The accounting policies have been applied consistently to the periods presented in the Restated Financial
Statements and Unaudited Interim Financial Information.

Change in Accounting Policies in Previous 3 Years

The Company has adopted Ind AS notified under section 133 of the Companies Act 2013 (“the Act”) read with
the Companies (Indian Accounting Standards) Rules, 2015 from April 01, 2023 and the effective date of such
transition is April 01, 2022 due to the approval of the Scheme of Merger by Absorption of Canopy Finance
Limited by Purple Finance Limited by Hon’ble National Company Law Tribunal, Mumbai Bench (’NCLT’) on
February 15, 2024. For periods up to and including the year ended March 31, 2023, the Company had prepared
and presented its financial statements in accordance with the erstwhile generally accepted accounting principles
in India (Indian GAAP). In order to give effect of the transition to Ind AS these financial statements for the year
ended March 31, 2024, together with the comparative financial information for the previous year ended March
31, 2023 and the transition date balance sheet as at April 1, 2022 have been prepared under Ind AS.

The transition to Ind AS, has involved changes in the Company’s policies and processes relating to financial
reporting. Further, the management has also exercised judgement (wherever applicable) in giving effect to various
principles of Ind AS in its first-time adoption.

1. MACRO ECONOMIC OVERVIEW

(a) Global Economy

Global growth is projected at 3.1 percent in 2024 and 3.2 percent in 2025, on account of greater-than-
expected resilience in the United States and several large emerging market and developing economies,
as well as fiscal support in China. The forecast for 2024–25 is, however, below the historical (2000–19)
average of 3.8 percent, with elevated central bank policy rates to fight inflation, a withdrawal of fiscal
support amid high debt weighing on economic activity, and low underlying productivity growth.
Inflation is falling faster than expected in most regions, in the midst of unwinding supply-side issues and
restrictive monetary policy. Global headline inflation is expected to fall to 5.8 percent in 2024 and to 4.4
percent in 2025, with the 2025 forecast revised down.

With disinflation and steady growth, the likelihood of a hard landing has receded, and risks to global
growth are broadly balanced. On the upside, faster disinflation could lead to further easing of financial
conditions. Looser fiscal policy than necessary could imply temporarily higher growth, but at the risk of
a more costly adjustment later on. Stronger structural reform momentum could bolster productivity with
positive cross-border spillovers. On the downside, new commodity price spikes from geopolitical
shocks––including continued attacks in the Red Sea––and supply disruptions or more persistent
underlying inflation could prolong tight monetary conditions. Deepening property sector woes in China
or, elsewhere, a disruptive turn to tax hikes and spending cuts could also cause growth disappointments.

The uncertainty on the pace and timing of policy pivots by central banks is keeping financial markets
volatile. Equity markets have touched new highs in both advanced and emerging market economies.
Non-energy commodity prices have firmed up, while the US dollar and bond yields are exhibiting two-
way movement with spillovers to emerging market currencies. Gold prices have surged to record highs
on safe haven demand.

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 While the risk of tight and volatile global financial conditions persists, India’s vulnerability to these
external shocks likely to be lower in Fiscal 2025. This, coupled with the adequate forex reserves and the
country’s good growth prospects, should cushion the impact of a global spill over on Indian
macroeconomic conditions. IMF has projected Indian economy to grow at 6.8% in FY 2024-2025.

Source: International Monetary Fund Forecast

(b) Indian Economy

According to the provisional estimates released by the National Statistical Office (NSO) on May 31,
2024, real gross domestic product (GDP) growth in Q4:2023-24 stood at 7.8 per cent as against 8.6 per
cent in Q3. Real GDP growth for 2023-24 was placed at 8.2 per cent. On the supply side, real gross value
added (GVA) rose by 6.3 per cent in Q4:2023-24. Real GVA recorded a growth of 7.2 per cent in 2023-
24.

Headline inflation has seen sequential moderation since February 2024, albeit in a narrow range from
5.1 per cent in February to 4.8 per cent in April 2024. Food inflation, however, remains elevated due to
persistence of inflation pressures in vegetables, pulses, cereals, and spices. Deflation in fuel prices
deepened during March-April, reflecting the cut in liquefied petroleum gas (LPG) prices. Core (CPI
excluding food and fuel) inflation eased further to 3.2 per cent in April, the lowest in the current CPI
series, with core services inflation also falling to historic lows.

Going forward, high frequency indicators of domestic activity are showing resilience in 2024-25. The
south-west monsoon is expected to be above normal, which augurs well for agriculture and rural demand.
Coupled with sustained momentum in manufacturing and services activity, this should enable a revival
in private consumption. Investment activity is likely to remain on track, with high-capacity utilisation,
healthy balance sheets of banks and corporates, Government’s continued thrust on infrastructure
spending, and optimism in business sentiments. Improving world trade prospects could support external
demand. Headwinds from geopolitical tensions, volatility in international commodity prices, and
geoeconomic fragmentation, however, pose risks to the outlook. Taking all these factors into
consideration, real GDP growth for 2024-25 is projected at 7.2 per cent with Q1 at 7.3 per cent; Q2 at
7.2 per cent; Q3 at 7.3 per cent; and Q4 at 7.2 per cent (Chart 1). The risks are evenly balanced.

Source: RBI Monetary Policy Statement dated 21st June 2024

2. NBFC SECTOR OVERVIEW

As per CRISIL projection NBFC credit to grow at 12%-14% between Fiscal 2023 and Fiscal 2025. The
credit growth will be driven by the retail vertical, including housing, auto, MSME and microfinance
segments. Rapid revival in the economy is expected to drive consumer demand in Fiscal 2024, leading
to healthy growth for NBFCs. Moreover, organic consolidation is underway with larger NBFCs gaining
share with some of the merger and acquisition in the NBFC space.

The retail credit market in India stood at Rs 60 trillion as of fiscal 2023 and is rapidly growing at a
CAGR of 14.3% during Fiscals 2018 and 2023. Retail credit growth in Fiscal 2020 was around
approximately 16.3% which came down to approximately 9.5% in Fiscal 2021. However, post-
pandemic, retail credit growth revived back to reach approximately 11.3% in Fiscal 2022. In Fiscal 2023,
retail credit has grown at approximately 19-20% year on year basis. The Indian retail credit market is
expected to further grow at a CAGR of 13-15% between fiscal 2023 to fiscal 2025 and reach a size of
Rs 77 trillion by FY 2025. Moreover, the increasing demand and positive sentiments in the Indian retail
credit market, presents an opportunity for both banks and NBFCs to broaden their investor base. Share
of NBFC credit in the overall systemic credit remained @ 18% in Fiscal 2023.

In terms of the credit to GDP ratio, India has a low credit penetration compared with other developing
countries, such as, China, indicating a significant untapped potential. Similarly, in terms of credit to
households as a proportion of GDP as well, India lags other markets.

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 Rural India accounts for about half of GDP, but only about 8% of total credit and 9% of total deposits.
Rural India under penetration and untapped market presents a huge opportunity for growth. Credit to
metropolitan areas has decreased over the past few years with its share decreasing from 66% as at March
31, 2018 to 62% as at June 30, 2023. Between the same period, credit share has witnessed a marginal
rise in rural and urban areas.

Asset quality for NBFCs is influenced by various factors such as economic cycle, target customer
segment, geographical exposure, and local events. Within the NBFC universe itself, it is observed that
various asset classes tend to exhibit heterogeneous behaviour. For example, the asset quality in small
business loans and personal loans tends to be highly correlated with the macroeconomic environment.
On the other hand, microfinance loans have shown lower historic correlation with macroeconomic
cycles. This is because asset quality is more influenced by local factors, events that have wide ranging
repercussions such as demonetisation and COVID-19 and relative leverage levels amongst borrowers.

It is estimated that the GNPAs for NBFCs to have reduced significantly at the end of Fiscal 2023. The
gross NPAs for NBFCs have reduced to 5.8% in FY 22 and expected to be around 4.8% in FY 23. It is
expected the same will further reduce by at least 50 bps in FY 24.

The share of disbursements for NBFCs in unsecured loans and MSME finance, the non-traditional
segments, has increased over the past 1.5 years. In the first half of this fiscal, ~35% of incremental
disbursements were for unsecured loans. Small business loans grew at a fast pace, registering a CAGR
of 15% over Fiscal 2018 and 2023. It is estimated that outstanding small business loans given out by
banks and NBFCs to be around Rs 11.7 trillion as of March 2023.

The LAP portfolio NPAs have reduced from 4.7% in March 21 to 4.3% in March 22. With increasing
branch network, customer acquisition and credit penetration, share of MSME loans is also expected to
increase. Number of branches have grown at 16% CAGR over Fiscals 2017 and 2023 and is around 6638
branches.

Source: 1) CII-KPMG Report for NBFC: February 2024; 2) NBFC Report by CRISIL & ASSOCHAM; 3) Market Intelligence
and Analytics for NBFCs by CRISIL and Northern Arc: December 2023

3. FINANCIAL PERFORMANCE AND BUSINESS OVERVIEW

The following table presents the financial results of the Company’s operations for the year ended March
31, 2024:
(Rs. in Lakhs)
Particulars FY 2023-2024 FY 2022-2023*
Gross income 44,422.38 25,607.73
NPA & other provisions (ECL Provisions) 481.17 8,162.32
Other expenses 1,76,522.86 79,710.71
Profit / (loss) before tax (1,32,581.66) (62,265.30)
Current Tax - 246.84
Deferred Tax (56,455.12) 816.73
Provision for tax - (50.45)
Net Profit / (loss) after tax (76,126.54) (63,278.42)
*Previous year figures have been regrouped / rearranged wherever necessary.

The Company incurred a loss before tax of Rs. 7,61,26,535.86/- during the FY 2023-24 as compared to
loss before tax of Rs. 6,32,78,422.78/- for the FY 2022-23. The loss is primarily on account of company
foraying into retail lending business in October 2022. The Company is in the build-up phase, and now
has the Senior Management team in place. The Company has opened 17 branches in the Financial Year
marking its presence in 3 different states across India. This has led to investments in human resources
and technology which will start giving results going forward. This involved substantial investment in
building branch network, implementing IT systems, hiring manpower and other opex with a view to
increase disbursements and become an institution of size in the future engaged in MSME secured
lending. Your company will continue to expand in this segment with new branches, investment in
technology and hiring additional manpower to increase distribution foot print. The management has a

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 view to build a large institution in retail lending in coming years backed by strong governance,
compliance, risk metrics and would do substantial investment in technology to improve operational
efficiency and reduce cost.

SHAREHOLDERS’ FUNDS

As of March 31, 2024, the Shareholders’ funds of the Company amounted to Rs. 48,32,95,657.46/- as
compared to Rs. 17,29,64,768.78/- as on March 31, 2023.

4. OUTLOOK AND OPPORTUNITIES

Purple Finance Limited is into MSME lending which is very large and untapped market to tap into.
Micro, Small and Medium Enterprise sector has been recognized as the backbone of the Indian economy
for the past several decades expected to drive the country’s growth and employment generation. The
government envisages MSMEs to contribute USD 2 trillion to the target of becoming USD 5 trillion
economy by 2024. In August 2021, MSME Ministry announced a target to boost MSME contribution to
the GDP to 50% by 2025. India has approximately 6.3 crore MSMEs and the number of registered
MSMEs stood at 80.16 lakh units as on March 31, 2022, indicating that 88% of enterprises still exist in
the informal sector. Micro sector accounts for more than 99% of total estimated number of MSMEs and
around 97% of total employment in the sector. Out of the estimated 633.88 million MSMEs, 324.88 lakh
(51.25%) are in rural areas, while 309 lakh (48.75%) are in urban areas.

The credit gap to MSMEs have increased from Rs 69.3 trillion to estimated Rs 92 trillion in FY 2023 as
per government estimate. The new MSME units continue to be set up across India. Between Fiscals 2016
and 2022, 18.3 million units were set up, according to the Government of India registration data of
MSMEs. Thus, though a myriad of small businesses is set up every day in India, access to credit remains
a challenge. However, the industry has witnessed an increase in access to formal credit to MSME, which
could be attributed to the increase in the number of registered MSMEs to 13,093,698 in Fiscal 2023 from
495,013 in Fiscal 2016.

Hence this is a huge opportunity for Purple Finance Limited to address this untapped MSME lending
market through secured product offering.

5. CHALLENGES

NBFCs also have their share of challenges. One of the biggest challenges facing NBFCs in India is
access to funding. Unlike banks, which have access to low-cost deposits, NBFCs must rely on borrowing
from banks or issuing bonds to raise funds. This can make it difficult for NBFCs to compete with banks
on interest rates. The dependence on banks have increased cost of funds for NBFCs. In Fiscal 2023,
NBFCs borrowings from banks witnessed high growth resulting in an increase in share to 36% of
total funding up from 29% at the end of Fiscal 2022. Share of bank’s lending to NBFCs have almost
doubled during last 10 years. As per a CRISIL report there is a need of around Rs 10 trillion funding
by NBFCs to cater to their growth in Fiscal 2024 to 2026. There must be alternate avenues like
NCDs, Bonds, Securitisation etc. which will augment this funding requirement of NBFCs apart
from bank funding. New NBFCs especially unrated one will continue facing challenge in raising
funding.

The second challenge is competition from banks. Looking at the attractive segment of MSME lending
many banks, Fintech companies and several large and small NBFCs have become active lately in MSME
segment. Purple Finance Ltd. must stay competitive through superior customer service, quick disbursal,
and technology enhancement to stay relevant. Also as mentioned above this challenge is partially
mitigated because of large untapped MSME market.

6. INTERNAL CONTROL SYSTEMS

The Company has adequate systems of internal control in place which are commensurate with its size
and the nature of operations. The Company maintains a system of internal controls designed to provide
a high degree of assurance regarding the effectiveness and efficiency of operations, the adequacy of

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 safeguards for assets, the reliability of financial controls and compliance with applicable laws and
regulations. The company also monitors various activities through defined policies, process, and SOPs.
The company has strong corporate governance framework and the same continuously reviewed through
various committees like Board of Directors, Management Committee, Risk Management Committee, IT
Committee, HR committee etc.

7. RISKS & CONCERNS

In today’s challenging and competitive environment, strategies for mitigating inherent risks in
accomplishing the growth plans of the Company are imperative. The Company recognizes that risk is an
integral part of business and is committed to managing the risk in proactive and efficient manner. The
Company had adopted risk management system through framework of different policies and creating a
robust internal monitoring processes to ensure sustainable business growth with stability and to promote
a proactive approach in reporting, evaluating and resolving risks associated with the business. In order
to achieve the key objective, the system establishes a structured and disciplined approach to Risk
Management.

The Company is exposed to specific risks that are particular to its business and the environment within
which it operates. This includes market risk, credit risk, liquidity and interest rate risk, regulatory risk,
macro-economic risk, etc.

• Market Risk: The Company does not invest in market instruments therefore has limited
exposure to market risk.

• Credit Risk: Credit risk is the risk arising out of default or failure on the part of borrowers in
meeting their financial obligations towards repayment of loans. Thus, credit risk is a loss as a
result of non-recovery of funds lent both on principal and interest counts. There is robust credit
process with the risk oversight. The client selection is clearly defined, capability of repayment
is rigorously assessed to reduce the defaults and since most of the loans are secured against
assets which are valued by independent agencies and the loan to value ratio is restricted, chances
of non-recoverability in case of default are minimized. The Company proposes to use various
tools like portfolio analytics, bounce analysis, month on board analysis, early vintage analysis
and net flow forward analysis to monitor early stress in the portfolio. These will be reported to
senior management through Risk Management Committee periodically and if required course
correction is undertaken.

• Liquidity and Interest Rate Risk: The Company is exposed to liquidity risk principally, as a
result of lending and investment for maturity period which may differ from those of its funding
sources. The Company will manage this risk by prudent management of resources including
long term loans.

• Regulatory Risk: As an entity in the financial services sector, the Company is subject to
regulations by Indian governmental authorities, including the Reserve Bank of India. Their laws
and regulations impose numerous requirements on the Company, including asset classification
and prescribed levels of capital adequacy, solvency requirements and liquid assets. There may
be future changes in the regulatory system or in the enforcement of the laws and regulations
that could adversely affect the Company’s performance. All the players are sensitive to this risk
and any adverse effect is not isolated to the Company.

• Macro-economic Risk: Any unfavourable economic conditions, unstable political

environment and changes in Government policies could impact the growth of the Company.
Any slowdown in the Indian economy and in particular the financing business could adversely
affect the Company’s business. The rural economy is resilient and market is also very large,
therefore any slowdown will have only temporary effect.

• Operational Risk: The Company is exposed towards various operational risks in the course of
its business relating to people, internal controls, processes, technology, infrastructure and other

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 external factors. Towards minimizing operational risks, the Company has created ‘maker-
checker’ rule in all processes. The Risk Management Committee monitors the operation
processes. The Company believes its efforts to continuously strengthen its risk framework and
portfolio quality will help it build a stable business franchise.

Access to capital and funds, both short term and long term, managing asset-liability mismatches and
managing growth without compromising asset quality are some of the challenges faced by all the players,
big and small, in the NBFC sector. Your Company is no exception to this. However, we constantly invest
in people, processes, technology and systems to manage and mitigate these challenges. Strong credit
underwriting processes, early warning checks, strong portfolio analytics to minimise portfolio
delinquency are on-going efforts.

8. HUMAN CAPITAL

Your company recognizes that Human capital is one of the most critical assets of any business enterprise.
Guided by this very philosophy the Company ensures recruitment of the most suitable manpower, trains
them to handle their respective roles, empowers them to discharge their duties well and provide an
enabling environment for their professional growth. The company has a well-defined on-boarding
process and well-structured post joining induction process. The company also has deployed a digitally
advanced Human Resource Management System (HRMS) to automate most of the HR processes and
controls. Currently the company employs around 216 people.

Results of Operations

The following table sets forth certain information with respect to our results of operations for the
quarter ended June 30, 2024 and June 30, 2023.

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Purple Finance Limited
Unaudited Profit and Loss Statement for the three months period ended June 30
(Rs. In Lakhs)
As at 30th June % of Total As at 30th June % of Total
Particulars
2024 Income 2023 Income
INCOME
Revenue from operations
Interest income 172.78 81.13% 28.23 38.69%
Fees and commission income 24.79 11.64% 5.21 7.14%
Sale of services - 0.00% 1.20 1.64%
Dividend income - 0.00% 0.25 0.34%
Net gain on fair value changes 2.33 1.10% 38.08 52.19%
Total revenue from operations 199.90 93.87% 72.98 100.00%
Other income 13.06 6.13% - 0.00%
Total income (A) 212.96 100.00% 72.98 100.00%

EXPENDITURE
Finance costs 87.25 40.97% 4.84 6.64%
Employee benefit expenses 400.61 188.11% 228.16 312.64%
Impairment on financial instruments 2.19 1.03% 0.23 0.32%
Depreciation, amortization and impairment 35.08 16.47% 24.67 33.80%
Other expenses 102.49 48.13% 50.08 68.62%
Total expenses (B) 627.62 294.71% 307.98 422.02%
Profit Before Extra - ordinary item and tax C=A-B (414.66) -194.71% (235.00) -322.02%
Exceptional Item (D) - 0.00% - 0.00%
Tax expense:
i)Current tax - 0.00% - 0.00%
ii)Deferred Tax Expenses/Income 7.96 3.74% 0.47 0.65%
Total Tax Expenses 7.96 3.74% 0.47 0.65%
Profit for the period ended (422.62) -198.45% (235.47) -322.66%
Other comprehensive income
(I) Items that will not be reclassified to profit or loss
(i) Remeasurements of the defined benefit plans (0.04) -0.02% - 0.00%
(ii) Income tax impact 0.01 0.00% - 0.00%
(II) Items that will be reclassified to profit or loss
(i) Financial instrument - 0.00% - 0.00%
(ii) Income tax impact - 0.00% - 0.00%
(iii) Fair Value gain/( Loss) on equity instruments ( Net of Tax ) 0.00% 0.00%
- -
Other comprehensive income/(loss) net of tax for the period ended (0.03) -0.01% - 0.00%
Total comprehensive income net of tax for the period ended (422.65) -198.46% (235.47) -322.66%

Comparison of three months period ending June 30, 2024 with three months period ending June 30, 2023

Total Income

Our total income increased by 191.82% to ₹2.13 crores for the quarter ended June 30, 2024 from 0.73 crores for
the quarter ended June 30, 2023. The changes are due to following reasons:

Revenue from operations

Our revenue from operations increased by 173.92% to ₹2.00 crores versus Rs 0.73 for the quarter ended June 30,
2024 and June 30, 2023. This was due to increase in the number of branches.

Interest Income

Our interest income increased by 511.97% to ₹1.73 crore versus ₹0.28 crores for the quarter ended June 30, 2024
and June 30, 2023 on account of increase in AUM

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Fees and commission income

Our income from fees and commissions increased by 375.36% to ₹0.25 v/s ₹0.05 crores for the quarter ended
June 2024 and 2023 on account of higher log ins.

Other income

Our other income was ₹0.13 crore for the quarter ended June 2024.

Expenses

Our total expenses increased by 103.78% to ₹ 6.28 crores v/s ₹3.08 crore, for the quarter ended June 2024 and
2023 due to following reasons:

Finance cost

Our finance cost increased by 1701% to ₹0.87 crores v/s ₹0.05 crores for the quarter ended June 2024 and 2023.
This is on account of increased debt in line with increase in AUM.

Employee benefit expense

Our employees benefit expense increased by 75.58% to ₹4.01 crore v/s ₹2.28 crores for the quarter ended June
2024 and 2023 due to increase in no of employees.

Other Expenses

Our other expenses increased by 104.67% to ₹1.02 crore v/s ₹0.50 crores for the quarter ended June 2024 and
2023. This mainly comprises of Software expenses, commission, Rent, professional Fees, travelling expenses,
listing charges etc.

Profit/(Loss) for the period after tax

Our loss for the quarter ended June 2024 stood at ₹4.23 crores as compared to loss of ₹2.35 crores for quarter
ended June 2023

The following table sets forth certain information with respect to our results of operations for the Fiscals 2024,
2023 and 2022:

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Purple Finance Limited
Restated Profit and Loss Statement for the year ended 31st March 2024
(Rs. In Lakhs)
As at 31st % of Total As at 31st % of Total As at 31st % of Total
Particulars
March 2024 Income March 2023 Income March 2022 Income
INCOME
Revenue from operations
Interest income 290.44 65.38% 129.25 50.47% 90.30 -29.00%
Fees and commission income 54.05 12.17% 4.72 1.85% 0.20 -0.06%
Sale of services 8.90 2.00% 23.40 9.14% - 0.00%
Dividend income 1.95 0.44% 6.94 2.71% 4.27 -1.37%
Net gain on fair value changes 86.91 19.56% 91.21 35.62% (406.15) 130.44%
Total revenue from operations 442.24 99.55% 255.53 99.78% (311.37) 100.00%
Other income 1.98 0.45% 0.55 0.22% - 0.00%
Total income (A) 444.22 100.00% 256.08 100.00% (311.37) 100.00%

EXPENDITURE
Finance costs 104.11 23.44% 15.05 5.88% 5.00 -1.61%
Employee benefit expenses 1,165.31 262.32% 502.37 196.18% 94.22 -30.26%
Impairment on financial instruments 4.81 1.08% 81.62 31.87% 228.95 -73.53%
Depreciation, amortization and impairment 117.69 26.49% 66.90 26.12% 14.69 -4.72%
Other expenses 378.12 85.12% 212.79 83.10% 97.15 -31.20%
Total expenses (B) 1,770.04 398.46% 878.73 343.15% 440.02 -141.32%
Profit Before Extra - ordinary item and tax C=A-B (1,325.82) -298.46% (622.65) -243.15% (751.39) -241.32%
Exceptional Item (D) - 0.00% - 0.00% - 0.00%
Tax expense:
i)Current tax - 0.00% 2.47 0.96% - 0.00%
ii)Deferred Tax Expenses/Income (564.55) -127.09% 8.17 3.19% (18.69) -6.00%
iii)Provision for tax related to earlier years - 0.00% (0.50) -0.20% 4.03 1.29%
Total Tax Expenses (564.55) -127.09% 10.13 3.96% (14.66) -4.71%
Profit for the year (761.27) -171.37% (632.78) -247.11% (736.74) -236.61%
Other comprehensive income
(I) Items that will not be reclassified to profit or loss
(i) Remeasurements of the defined benefit plans (0.16) -0.04% - 0.00% - 0.00%
(ii) Income tax impact 0.04 0.01% - 0.00% - 0.00%
(II) Items that will be reclassified to profit or loss
(i) Financial instrument - 0.00% - 0.00% - 0.00%
(ii) Income tax impact - 0.00% - 0.00% - 0.00%
(iii) Fair Value gain/( Loss) on equity instruments ( Net of Tax ) 0.00% 0.00% 0.00%
- - -
Other comprehensive income/(loss) net of tax for the year (0.12) -0.03% - 0.00% - 0.00%
Total comprehensive income net of tax for the year (761.38) -171.40% (632.78) -247.11% (736.74) -236.61%

Principal Components of our statement of Profit and Loss

I. Income

Our total income comprise of (i) revenue from operations, and (ii) other income

• Revenue from operations: Revenue from operations comprises of

i. Interest Income - This consist of interest income earned on loans and deposits.
ii. Fess and commission – This consists of log in and admin fees charged for the loan
iii. Sale of Services – This consists of advisory services provided
iv. Dividend income – This consists of dividend received on investments made
v. Net gain on fair value change. – This represents realized and unrealized gains on
investments held by the company
• Other income: Other income comprises of
i. Gain on Derecognition of lease – This represents gain on extinguishment of lease
liability.
ii. Interest on income tax refund.

II. Expenses: Our total expenses comprise of:

i. Finance costs – Finance cost comprises of interest on borrowings, debt securities, subordinated
liabilities, unwinding interest in lease liabilities and other finance cost.

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 ii. Employee benefit expenses – This consists of salaries, wages, bonus, contribution to provident
and other funds, employee stock option, and other staff welfare exp.
iii. Impairment on financial instruments – This represents provisions made against financial assets
such as loans and advances, trade receivables etc.
iv. Depreciation, amortization and impairment – This consists of depreciation expense of lease
assets, plant and equipment, motor car, furniture & fixture, office equipment, computers.
v. Other expenses – Others expenses comprise of expenses related to legal & technical services
availed from experts, direct operating activities of loans, advertising & marketing, security,
travel & conveyance, software, repaints & maintenance etc.

For the year ended 31st March, 2024 as compared to 31st March 2023

Total Income

Our total income increased by 73.47% to ₹4.44 crores for the year ended 31 st March, 2024 from ₹2.56 crores for
the year ended 31st March 2023. The changes are due to following reasons:

Revenue from operations

Our revenue from operations increased by 73.07% to ₹4.42 crores for the year ended 31 st March, 2024 from ₹2.56
crores for the year ended 31st March 2023. 31, 2023 mainly due to increase in the number of branches.

Interest Income

Our interest income increased by 124.71% to ₹2.90 crore for the year ended 31 st March, 2024 from ₹1.29 crores
for the year ended 31st March, 2023 primarily because of increase in AUM from ₹ 30.48 crores as on 31st March
24 compared to ₹13.04 Crores as on March 23.

Dividend Income

Our dividend income was decreased to ₹0.02 crore for the year ended 31st March, 2024 from ₹0.07 crores for the
year ended 31st March, 2023, due to sale of investment.

Fees and commission income

Our income from fees and commissions increased by 1043.94% to ₹0.54 crore for the year ended 31 st March,
2024 from ₹0.05 crores for the year ended 31st March, 2023 primarily because of increase in disbursements during
the year.

Sale of Services

Our income from sale of services decreased to ₹0.09 crore for the year ended 31 st March, 2024 from ₹0.23 crore
for the year ended 31st March, 2023 because of decrease in advisory fees.

Net gain on fair value changes

Our net gain on fair value changes was ₹0.87 crore for the year ended 31 st March, 2024 compared to ₹0.91 crores
for the year ended 31st March, 2023 due to sale of investment.

Other income

Our other income increased by 259.50% to ₹0.02 crore for the year ended 31 st March, 2024 from ₹0.006 crores
for the year ended 31st March, 2023. This is primarily due to gain on de-recognition of lease

Expenses

Our total expenses increased by 101.43% to ₹ 17.70 crore for the year ended 31 st March, 2024 from ₹8.79 crore
for the year ended 31st March, 2023, due to following reasons:

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Finance cost

Our finance cost increased by 591.86% to ₹1.04 crores for the year ended 31 st March, 2024 from ₹0.15 crores for
the year ended 31st March, 2023 due to increase in total borrowing from ₹ 0.30 Crores to ₹ 22.13 Crores.

Impairment on financial instruments

Our impairment on financial instruments was ₹0.05 crores for the year ended 31 st March, 2024 compared to ₹0.82
crores for the year ended 31st March, 2023 due to no diminution of investment in unlisted shares.

Employee benefit expense

Our employees benefit expense increased by 131.96% to ₹11.65 crore for the year ended 31 st March, 2024 from
₹ 5.02 crores for the year ended 31 st March, 2023 primarily on account of increase in headcount.

Depreciation, amortisation and impairment expense

Our depreciation and amortisation expenses increased by 75.92% to ₹1.18 crore for the year ended 31 st March,
2024 from ₹0.67 crores for the year ended 31 st March, 2023 due to addition of fixed assets.

Other Expenses

Our other expenses increased by 77.70% to ₹3.78 crore for the year ended 31 st March, 2024 from ₹2.13 crores for
the year ended 31st March, 2023 due to increase in employee, rent due to increase in number of branches and
finance cost..

Profit/Loss before tax for the period

Our loss before tax increased by 112.93% to ₹ 13.26 crore for the year ended 31 st March, 2024 from ₹6.23 crores
for the year ended 31st March 2023 due to increase in expenses.

Profit/Loss for the period after tax

Our loss for the year ended 31st March, 2024 stood at ₹7.61 crores as compared to loss of ₹6.33 crores for the year
ended 31st March, 2023 due to the above mentioned reasons.

Net gain/loss on other comprehensive income

Our net loss on other comprehensive income was ₹0.001 crore for the year ended 31 st March, 2024.

Total Comprehensive Income net of tax for the year

Our total comprehensive income was ₹ -7.61 crore for the year ended 31 st March, 2024 as compared to ₹ -6.33
crore for the year ended 31st March, 2023 due to increase in loss.

For the year ended 31st March, 2023 as compared to 31st March 2022

Total Income

Our total income increased by 182.24% to ₹2.56 crores for the year ended 31st March, 2023 from ₹-3.11 crores
for the year ended 31st March 2022. The changes are due to following reasons:

Revenue from operations

Our revenue from operations increased by 182.06% to ₹2.56 crores for the year ended 31 st March, 2023 from ₹-
3.11 crores for the year ended 31 st March 2022 due to increase in the number of branches and expansion of
business.

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Interest Income

Our interest income increased by 43.13% to ₹1.29 crore for the year ended 31 st March, 2023 from ₹0.90 crores
for the year ended 31st March, 2022 due to increase in AUM.

Dividend Income

Our dividend income was increased to ₹0.07 crore for the year ended 31 st March, 2023 from ₹0.04 crores for the
year ended 31st March, 2022 due to increase in investment.

Fees and commission income

Our income from fees and commissions increased by 2262.32% to ₹0.05 crore for the year ended 31 st March,
2023 from ₹0.002 crores for the year ended 31 st March, 2022 due to increase in business.

Sale of Services

Our income from sale of services was ₹0.23 crore for the year ended 31 st March, 2023.

Net gain on fair value changes

Our net gain on fair value changes was ₹0.91 crore for the year ended 31 st March, 2023 compared to ₹-4.06 crores
for the year ended 31st March, 2022. This increase was due to increase in value of investment held / sold.

Other income

Our other income was ₹0.006 crore for the year ended 31 st March, 2023.

Expenses

Our total expenses increased by 99.70% to ₹ 8.79 crore for the year ended 31 st March, 2023 from ₹4.40 crore for
the year ended 31st March, 2022, due to following reasons:

Finance cost

Our finance cost increased by 200.74% to ₹0.15 crores for the year ended 31 st March, 2023 from ₹0.05 crores for
the year ended 31st March, 2022 due to increase in borrowings.

Impairment on financial instruments

Our impairment on financial instruments was ₹0.82 crores for the year ended 31 st March, 2023 compared to ₹2.29
crores for the year ended 31st March, 2022 due to decrease in investment.

Employee benefit expense

Our employees benefit expense increased by 433.19% to ₹5.02 crore for the year ended 31 st March, 2023 from
₹0.94 crores for the year ended 31 st March, 2022 primarily on account of increase of number of employees.

Depreciation, amortisation and impairment expense

Our depreciation and amortisation expenses increased by 355.30% to ₹0.67 crore for the year ended 31 st March,
2023 from ₹0.15 crores for the year ended 31 st March, 2022 due to addition of fixed assets.

Other Expenses

Our other expenses increased by 119.03% to ₹2.13 crore for the year ended 31 st March, 2023 from ₹0.97 crores
for the year ended 31st March, 2022, primarily due to increase in number of employees and branches.

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Profit/Loss before tax for the period

Our loss before tax decreased by 17.13% to ₹ 6.23 crore for the year ended 31 st March, 2023 from ₹7.51 crores
for the year ended 31st March 2022, primarily due to expansion of business.

Tax Expenses

Our tax expenses increased by 169.13% to ₹ 0.10 crore for the year ended 31 st March, 2023 from ₹-0.15 crores
for the year ended 31st March 2022 due to increase in income.

Profit/(Loss) for the period after tax

Our loss for the year ended 31st March, 2023 stood at ₹6.33 crores as compared to loss of ₹7.37 crores for the year
ended 31st March, 2022 due to the above mentioned reasons.

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 MARKET PRICE INFORMATION

As on the date of this Letter of Offer, 3,36,14,954 Equity Shares of our Company are issued, subscribed and fully
paid up. The Equity Shares have been listed and are available for trading on BSE and CSE.

Since the Equity Shares of our Company got listed on the Stock Exchanges in Financial Year 2024 with effect
from June 14, 2024, and June 18, 2024 the details of high, low and average of the closing prices of our Equity
Shares on the Stock Exchanges and number of Equity Shares traded on the days on which such high and low
prices were recorded for, and the volume of Equity Shares traded, for the last three financial years and for the last
six full months are not available and have not been included in this Letter of Offer.

Further, the equity shares actively traded on the BSE. There has been no trading in the Company's equity shares
on the CSE since June 18, 2024 thus market price and other information for CSE does not exist.

The Board of our Company has approved the Issue at their meeting held on June 20, 2024. The high and low prices
of our Company’s shares as quoted on the BSE on June 21, 2024, the day on which the trading happened
immediately following the date of the Board meeting is as follows:

Date Volume (No of equity Shares) High Price (₹) Low price (₹)
BSE
June 21, 2024 1,78,046 116.50 110.87
(Source: www.bseindia.com)

The closing market price of the Equity Shares as on one day prior * to the date of this Letter of Offer was ₹ 82.11
on the BSE. The Issue Price is ₹ 40/- per Rights Equity Share.

*As on September 19, 2024

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 SECTION VI – LEGAL AND OTHER INFORMATION

OUTSTANDING LITIGATIONS AND MATERIAL DEVELOPMENTS

Our Company is subject to various legal proceedings from time to time, primarily arising in the ordinary course
of business.

Except as disclosed below, there are no outstanding litigations with respect to the (i) issues of moral turpitude or
criminal liability on the part of our Company; (ii) material violations of statutory regulations by our Company;
(iii) economic offences where proceedings have been initiated against our Company; and (iv) any pending matters
including civil litigation and tax proceedings, which if they result in an adverse outcome, would materially and
adversely affect our operations or our financial position.

In relation to point (iv) above, our Board of Directors vide a resolution dated July 19, 2024, has considered and
adopted a ‘Policy for Determining Material Events and Information’, framed in accordance with Regulation 30
of the SEBI Listing Regulations (“Materiality Policy”). In terms of the Materiality Policy, any outstanding
litigations, involving our Company, whose total monetary impact is equivalent to or exceeds the lower of the
following:
a) 2% of turnover, as per the last audited financial statements of our Company;
b) 2% of net worth, as per the last audited financial statements of our Company, except in case the
arithmetic value of the net worth is negative; and
c) 5% of the average of absolute value of profit or loss after tax, as per the last three audited consolidated
financial statements of our Company.

Since points (a) and (b) above are not applicable, accordingly, all outstanding litigation (including civil and tax
proceedings), involving our Company whose monetary impact is equivalent to or in excess of 5% of the average
of absolute value of profit or loss after tax, as per the last three annual financial statements of our Company,
which is determined to be ₹ 8.84 lakhs have been disclosed in this section.

Additionally, it is clarified that pre-litigation notices received by our Company from third parties (excluding those
notices issued by statutory or regulatory or governmental authorities) shall not be evaluated for materiality until
such time our Company is impleaded as a defendant in litigation proceedings before any judicial forum.

Unless stated to the contrary, the information provided below is as of the date of this Letter of Offer. All terms
defined in a particular litigation disclosure below are for that particular litigation only

I. Litigation involving our Company.

A. Litigation filed against our Company

1. Criminal proceedings

Nil

2. Outstanding actions by regulatory and statutory authorities

Canopy Finance Limited vs. UOI and Ors.

A writ petition was filed by Canopy Finance Limited (now merged with Purple Finance Limited)
("Petitioner") against Union of India ("Respondent 1"), The Central Board of Direct Taxes
("Respondent 2") The Income Tax Officer, Ward 9(1), Kolkata ("Respondent 3"), The Principal
Commissioner of Income Tax-1, Kolkata ("Respondent 4"), The Principal Chief Commissioner of
Income Tax, west Bengal and Sikkim ("Respondent 5") at the High Court of Calcutta ("Hon'ble
Court"). A Notice was issued by Respondent 3 under unamended section 148 of the Income Tax Act,
1961 ("the Act") in the case of Petitioner Company for Assessment Year 2016-17. Respondent No.3
issued letter as per the directions of Hon'ble Supreme Court rendered in case of UOI vs. Ashish Agarwal
(2022 SCC Online SC 543) directing to treat notice dated June 23, 2021, issued under Section 148 of the

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 Act as deemed show cause notice under section 148A (b) of the Act. The Petitioner Company furnished
its first reply in response to aforesaid notice/letter dated May 24, 2022, for the disputed amount of INR
29.15 Lakhs. The Respondent No.3 passed Order under section 148A (d) of the Act stating that the instant
case is a fit case for issue of notice under section 148 of the Act. The Respondent No.3 issued notice
under section 148 of the Act, as amended by Finance Act, 2021. Consequently, the Petitioner filed the
presentation filed the present writ petition before the Hon'ble High Court.

3. Material civil proceedings

Nil

B. Litigation filed by our Company.

1. Criminal proceedings

Nil

2. Material civil proceedings

Canopy Finance Limited vs. UOI and Ors.

A writ petition was filed by Canopy Finance Limited (now merged with Purple Finance Limited)
("Petitioner") against Union of India ("Respondent 1"), The Central Board of Direct Taxes
("Respondent 2") The Income Tax Officer, Ward 9(1), Kolkata ("Respondent 3"), The Principal
Commissioner of Income Tax-1, Kolkata ("Respondent 4"), The Principal Chief Commissioner of
Income Tax, west Bengal and Sikkim ("Respondent 5") at the High Court of Calcutta ("Hon'ble
Court"). A Notice was issued by Respondent 3 under unamended section 148 of the Income Tax Act,
1961 ("the Act") in the case of Petitioner Company for Assessment Year 2016-17. Respondent No.3
issued letter as per the directions of Hon'ble Supreme Court rendered in case of UOI vs Ashish Agarwal
(2022 SCC Online SC 543) directing to treat notice dated June 23, 2021, issued under Section 148 of the
Act as deemed show cause notice under section 148A (b) of the Act. The Petitioner Company furnished
its first reply in response to aforesaid notice/letter dated May 24, 2022. The Respondent No.3 passed
Order under section 148A (d) of the Act stating that the instant case is a fit case for issue of notice under
section 148 of the Act. The Respondent No.3 issued notice under section 148 of the Act, as amended by
Finance Act, 2021. Consequently, the Petitioner filed the presentation filed the present writ petition
before the Hon'ble High Court.

II. Litigation involving our Directors

A. Litigation filed against our Directors

1. Criminal proceedings

Nil

2. Outstanding actions by regulatory and statutory authorities

Nil

3. Material civil proceedings

Nil

B. Litigation filed by our Directors

1. Criminal proceedings

Nil

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2. Material civil proceedings

Nil

III. Litigation involving our Promoters

A. Litigation filed against our Promoters

1. Criminal proceedings

Nil

2. Outstanding actions by regulatory and statutory authorities

Nil

3. Material civil proceedings

Nil

B. Litigation filed by our Promoters

1. Criminal proceedings

Nil

2. Material civil proceedings

Nil

TAX PROCEEDINGS AGAINST OUR COMPANY, DIRECTORS, PROMOTERS

(₹ in Lakhs)*
Nature of case Number of cases Amount Involved
Company
Direct Tax 8 29.34
Indirect tax Nil Nil
Total 8 29.34
Directors (excluding promoters)
Direct Tax 1 1.16
Indirect Tax Nil Nil
Total 1 1.16
Promoter
Direct Tax 9 171.02^
Indirect Tax Nil Nil
Total 9 171.02
*To the extent quantifiable
^Amitabh Chaturvedi (our Promoter) has received a demand notice from the Income Tax Department for the
assessment year 2021-22 under Section 143(1) of the Income Tax Act, 1961. The notice outlines a total demand of
₹1,26,94,280, which includes tax liability, interest, and fees. The discrepancy arises from mismatches between the
tax credits claimed by the taxpayer and those allowed by the department. The demand notice calls upon the taxpayer
to either pay the outstanding amount within 30 days or file a rectification request if any errors are identified.

IV. Disclosures Pertaining to Wilful Defaulters or a Fraudulent Borrower

Neither our Company, nor our Promoters and Directors have been categorized or identified as wilful

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 defaulters or fraudulent borrower by any bank or financial institution or consortium thereof, in
accordance with the guidelines on wilful defaulters issued by the Reserve Bank of India. There are no
violations of securities laws committed by them in the past or are currently pending against any of them.

Further, we confirm that there are no show cause or legal notices, or any legal or regulatory proceedings
or investigations known to be initiated or contemplated against the Company except as follows:

Nil

V. Outstanding dues to creditors

As of June 30, 2024, our Company owes the following amounts to small scale undertakings and other
creditors.

Details of outstanding dues (trade payables) owed to micro, small and medium enterprises (as defined
under Section 2 of the Micro, Small and Medium Enterprises Development Act, 2006), and other
creditors, as of June 30, 2024, by our Company, are set out below and the disclosure of the same is
available on the website of our Company at www.purplefinance.in.

Type of Creditors Number of Creditors Amount (in Rs)

Outstanding dues to Small Scale Undertakings 11 3,60,793.51
Other dues to other Creditors 76 28,28,311.90
Total 87 31,89,105.41

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 GOVERNMENT AND OTHER STATUTORY APPROVALS

Our Company has obtained necessary consents, licenses, permissions and approvals from governmental and
regulatory authorities that are material for carrying on our present business activities. Some of the approvals and
licenses that our Company requires for our business operations may expire in the ordinary course of business, and
our Company will apply for their renewal from time to time.

We are not required to obtain any licenses or approvals from any governmental and regulatory authorities in
relation to the objects of this Issue. For further details, please refer to "Objects of the Issue" on page 47 of this
Letter of Offer.

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 OTHER REGULATORY AND STATUTORY DISCLOSURES

Authority for the Issue

The Issue has been authorised by a resolution of the Board passed at its meeting held June 20, 2024, pursuant to
Section 62(1)(a) and other applicable provisions of the Companies Act, 2013.

The Finance Committee has, at its meeting held on September 20, 2024 determined the Issue Price of ₹40/- per
Rights Equity Share (including a premium of ₹30/- per Rights Equity Share), and the Rights Entitlement as 1
(One) Rights Equity Share for every 3 (Three) fully paid-up Equity Shares held on the Record Date. The Issue
Price is ₹40/- and has been arrived at by our Company prior to determination of the Record date.

On Application, Investors will have to pay ₹40/- per Rights Equity Share, which constitutes 100 % of the Issue
Price.

Our Company has received ‘in-principle’ approval for listing of the Rights Equity Shares to be Allotted pursuant
to Regulation 28(1) of SEBI Listing Regulations, vide letter bearing reference number
LOD/RIGHT/TT/FIP/921/2024-25 dated September 13, 2024 issued by BSE and letter bearing reference number
CSE/LD/16381/2024 dated September 17, 2024 issued by CSE for listing of the Rights Equity Shares to be
Allotted pursuant to the Issue. Our Company will also make application to BSE and CSE to obtain their trading
approval for the Rights Entitlements as required under the SEBI Rights Issue Circulars.

Our Company has been allotted the ISIN INE0CYK20015 for the Rights Entitlements to be credited to the
respective demat accounts of the Eligible Equity Shareholders of our Company. Our Company has been allotted
ISIN INE0CYK20015 from both NSDL and CDSL. For details, see "Terms of the Issue" on page 182 of this
Letter of Offer.

Prohibition by SEBI or other Governmental Authorities

Our Company, our Promoters, our Directors, the members of our Promoter Group and persons in control of our
Company have not been prohibited from accessing the capital market or debarred from buying or selling or dealing
in securities under any order or direction passed by SEBI or any securities market regulator in any jurisdiction or
any authority/court as on date of this Letter of Offer.

There are no outstanding SEBI actions against our Company or our Promoters and members of our Promoter
Group as on the date of this Letter of Offer. For details, see chapter titled "Outstanding Litigations and Default"
on page 170 of this Letter of Offer.

Further, our Promoters and our Directors are not promoters or directors of any other company which is debarred
from accessing or operating in the capital markets or restrained from buying, selling or dealing in securities under
any order or direction passed by SEBI. Further, there is no outstanding action initiated against any of our Directors
or Promoters by SEBI in the five years preceding the date of filing of this Letter of Offer.

Neither our Promoters nor our Directors have been declared as fugitive economic offender under Section 12 of
Fugitive Economic Offenders Act, 2018.

Association of our Directors with the securities markets

None of our Directors are associated with the securities market.

Prohibition by RBI

Neither our Company nor our Promoters and Directors have been categorized or identified as wilful defaulters by
any bank or financial institution or consortium thereof, in accordance with the guidelines on wilful defaulters
issued by the Reserve Bank of India. There are no violations of securities laws committed by them in the past or
are currently pending against any of them.

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Eligibility for the Issue

Our Company is a listed company, incorporated under the Companies Act, 1956. The Equity Shares of our
Company are presently listed on BSE and CSE. We are eligible to undertake the Issue in terms of Chapter III and
other applicable provisions of the SEBI ICDR Regulations. Pursuant to Clause (2) of Part B-1 of Schedule VI to
the SEBI ICDR Regulations our Company is undertaking the Issue in compliance with Part B-1 of Schedule VI
of the SEBI ICDR Regulations.

Applicability of the SEBI ICDR Regulations

The present Issue being of less than ₹5,000 Lakhs, our Company is in compliance with first proviso to Regulation
3 of the SEBI ICDR Regulations and our Company shall file the copy of the Letter of Offer prepared in accordance
with the SEBI ICDR Regulations with SEBI for information and dissemination on the website of SEBI, i.e.
www.sebi.gov.in.

Compliance with Regulations 61 and 62 of the SEBI ICDR Regulations

Our Company is in compliance with the conditions specified in Regulations 61 and 62 of the SEBI ICDR
Regulations, to the extent applicable. Further, in relation to compliance with Regulation 62(1)(a) of the SEBI
ICDR Regulations, our Company undertakes to make an application to the BSE and CSE for listing of the Rights
Equity Shares to be issued pursuant to the Issue. BSE Limited is the Designated Stock Exchange for the Issue.

Disclaimer Clause of SEBI

THE PRESENT ISSUE, BEING LESS THAN ₹5,000 LAKHS, OUR COMPANY IS IN COMPLIANCE
WITH FIRST PROVISIO TO REGULATION 3 OF THE SEBI ICDR REGULATIONS AND OUR
COMPANY SHALL FILE A COPY OF THE LETTER OF OFFER PREPARED IN ACCORDANCE
WITH THE SEBI (ICDR) REGULATIONS WITH SEBI FOR INFORMATION AND DISSEMINATION
ON THE WEBSITE OF SEBI FOR INFORMATIVE PURPOSES.

Disclaimer from our Company and our Directors

Our Company accepts no responsibility for statements made other than in this Letter of Offer or in any
advertisement or other material issued by our Company or by any other persons at the instance of our Company
and anyone placing reliance on any other source of information would be doing so at their own risk.

Investors who invest in this Issue will be deemed to have represented to our Company, and their respective
directors, officers, agents, affiliates and representatives that they are eligible under all applicable law, rules,
regulations, guidelines and approvals to acquire the Rights Equity Shares, and are relying on independent
advice/evaluation as to their ability and quantum of investment in the Issue.

CAUTION

Our Company shall make all relevant information available to the Eligible Equity Shareholders in accordance
with the SEBI ICDR Regulations and no selective or additional information would be available for a section of
the Eligible Equity Shareholders in any manner whatsoever, including at presentations, in research or sales reports,
etc., after filing this Letter of Offer.

No dealer, salesperson or other person is authorized to give any information or to represent anything not contained
in this Letter of Offer. You must not rely on any unauthorized information or representations. This Letter of Offer
is an offer to sell only the Rights Equity Shares and the Rights Entitlements, but only under circumstances and in
the applicable jurisdictions. Unless otherwise specified, the information contained in this Letter of Offer is current
only as of its date.

Our Company and its directors, officers, agents, affiliates and representatives accept no responsibility or liability
for advising any Applicant, whether such Applicant is eligible to acquire any Rights Equity Shares.

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Disclaimer in respect of Jurisdiction

This Letter of Offer has been prepared under the provisions of Indian law and the applicable rules and regulations
thereunder. Any disputes arising out of the Issue will be subject to the jurisdiction of the appropriate court(s) in
Mumbai, Maharashtra, India only.

Disclaimer Clause of BSE

“BSE Limited (the “Exchange”) has given vide its letter dated September 13, 2024, permission to this Company
to use the Exchange's name in this Letter of Offer as the stock exchange on which this Company's securities are
proposed to be listed. The Exchange has scrutinized this letter of offer for its limited internal purpose of deciding
on the matter of granting the aforesaid permission to this Company. The Exchange does not in any manner:
• Warrant, certify or endorse the correctness or completeness of any of the contents of this letter of offer; or
• Warrant that this Company's securities will be listed or will continue to be listed on the Exchange; or
• Take any responsibility for the financial or other soundness of this Company, its promoters, its management
or any scheme or project of this Company;

and it should not for any reason be deemed or construed that this letter of offer has been cleared or approved by
the Exchange. Every person who desires to apply for or otherwise acquires any securities of this Company may
do so pursuant to independent inquiry, investigation and analysis and shall not have any claim against the
Exchange whatsoever by reason of any loss which may be suffered by such person consequent to or in connection
with such subscription/acquisition whether by reason of anything stated or omitted to be stated herein or for any
other reason whatsoever”

Disclaimer Clause of CSE

“CSE has given vide its letter dated September 17, 2024, permission to this Company to use the Exchange's name
in this Letter of Offer as the stock exchange on which this Company's securities are proposed to be listed.

The Exchange does not in any manner:

• Warrant, certify or endorse the correctness or completeness of any of the contents of this letter of offer; or
• Warrant that this Company's securities will be listed or will continue to be listed on the Exchange; or
• Take any responsibility for the financial or other soundness of this Company, its promoters, its management
or any scheme or project of this Company;

and it should not for any reason be deemed or construed that this Letter of Offer has been cleared or approved
by the Exchange.”

Designated Stock Exchange

The Designated Stock Exchange for the purposes of this Issue is BSE Limited.

Listing

Our Company will apply to BSE and CSE for final approval for the listing and trading of the Rights Equity Shares
subsequent to their Allotment. No assurance can be given regarding the active or sustained trading in the Rights
Equity Shares or the price at which the Rights Equity Shares offered under the Issue will trade after the listing
thereof.

Selling Restrictions

This Letter of Offer is solely for the use of the person who has received it from our Company or from the Registrar.
This Letter of Offer is not to be reproduced or distributed to any other person.

The distribution of this Letter of Offer, Abridged Letter of Offer, Common Application Form and the Rights
Entitlement Letter ("Issue Materials") and the issue of Rights Entitlements and Equity Shares on a rights basis
to persons in certain jurisdictions outside India is restricted by legal requirements prevailing in those jurisdictions.

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Persons into whose possession the Issue Materials may come are required to inform themselves about and observe
such restrictions.

Our Company is making this Issue on a rights basis to the Eligible Equity Shareholders and, in accordance with
the SEBI ICDR Regulations, the Company will dispatch Issue Materials only to the Eligible Equity Shareholders
who have a registered address in India or who have provided an Indian address to our Company. In case such
Eligible Equity Shareholders have provided their valid e-mail address, the relevant Issue Materials will be sent
only to their valid e-mail address and in case such Eligible Equity Shareholders have not provided their e-mail
address, then Issue Material will be physically dispatched, on a reasonable effort basis, to the Indian address
provided by them. Those overseas Shareholders, who do not update our records with their Indian address or the
address of their duly authorized representative in India, prior to the date on which we propose to e-mail or send a
physical copy of the Issue Materials, shall not be sent the issue Materials.

Investors can also access the Issue Materials from the websites of the Registrar, our Company and the Stock
Exchanges.

Our Company and the Registrar will not be liable for non-dispatch of physical copies of the Issue Materials.

No action has been or will be taken to permit the Issue in any jurisdiction, to the possession, circulation, or
distribution of this Letter of Offer, Abridged Letter of Offer or any other material relating to our Company, the
Equity Shares of Rights Entitlement in any jurisdiction, where action would be required for that purpose, except
that the Letter of Offer has been filed with SEBI and the Stock Exchanges.

Accordingly, the Rights Entitlements or Rights Equity Shares may not be offered or sold, directly or indirectly,
and the Issue Materials or any offering materials or advertisements in connection with the Issue may not be
distributed, in whole or in part, in any jurisdiction, except in accordance with legal requirements applicable in
such jurisdiction. Receipt of the Issue Materials will not constitute an offer in those jurisdictions in which it would
be illegal to make such an offer, and, in those circumstances, the Issue Materials must be treated as sent for
information purposes only and should not be acted upon for subscription to the Rights Equity Shares and should
not be copied or redistributed.

Accordingly, persons receiving a copy of the Issue Materials should not, in connection with the issue of the Rights
Equity Shares or the Rights Entitlements, distribute or send the Issue Materials to any person outside India where
to do so, would or might contravene local securities laws or regulations. If Issue Materials are received by any
person in any such jurisdiction, or by their agent or nominee, they must not seek to subscribe to the Rights Equity
Shares, or the Rights Entitlements referred to in the Issue Materials.

Any person who makes an application to acquire the Rights Entitlements or the Rights Equity Shares offered in
the Issue will be deemed to have declared, represented, warranted and agreed that such person is authorized to
acquire the Rights Entitlements or the Rights Equity Shares in compliance with all applicable laws and regulations
prevailing in his jurisdiction. Our Company, the Registrar, or any other person acting on behalf of our Company
reserves the right to treat any Application Form as invalid where they believe that Application Form is incomplete
or acceptance of such Application Form may infringe applicable legal or regulatory requirements and we shall not
be bound to allot or issue any Rights Equity Shares or Rights Entitlement in respect of any such Application Form.

Neither the delivery of the Issue Materials nor any sale hereunder, shall, under any circumstances, create any
implication that there has been no change in our Company’s affairs from the date hereof or the date of such
information or that the information contained herein is correct as at any time subsequent to the date of this Letter
of Offer or the date of such information. Each person who exercises Rights Entitlements and subscribes for Equity
Shares, or who purchases Rights Entitlements or Equity Shares shall do so in accordance with the restrictions set
out below.

THE CONTENTS OF THIS LETTER OF OFFER SHOULD NOT BE CONSTRUED AS LEGAL, TAX
OR INVESTMENT ADVICE. PROSPECTIVE INVESTORS MAY BE SUBJECT TO ADVERSE
FOREIGN, STATE OR LOCAL TAX OR LEGAL CONSEQUENCES AS A RESULT OF THE ISSUE
OF RIGHTS EQUITY SHARES OR RIGHTS ENTITLEMENTS. ACCORDINGLY, EACH INVESTOR
SHOULD CONSULT THEIR OWN COUNSEL, BUSINESS ADVISOR AND TAX ADVISOR AS TO
THE LEGAL, BUSINESS, TAX AND RELATED MATTERS CONCERNING THE ISSUE OF RIGHTS

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EQUITY SHARES. IN ADDITION, OUR COMPANY IS NOT MAKING ANY REPRESENTATION TO
ANY OFFEREE OR PURCHASER OF THE EQUITY SHARES REGARDING THE LEGALITY OF AN
INVESTMENT IN THE EQUITY SHARES BY SUCH OFFEREE OR PURCHASER UNDER ANY
APPLICABLE LAWS OR REGULATIONS.

NO OFFER IN THE UNITED STATES

THE RIGHTS ENTITLEMENTS AND THE RIGHTS EQUITY SHARES HAVE NOT BEEN AND WILL
NOT BE REGISTERED UNDER THE SECURITIES ACT OR THE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES AND MAY NOT BE OFFERED OR SOLD IN THE UNITED
STATES OF AMERICA OR THE TERRITORIES OR POSSESSIONS THEREOF (“UNITED
STATES”), AND APPLICABLE STATE SECURITIES LAWS. THE OFFERING TO WHICH THIS
LETTER OF OFFER RELATES IS NOT, AND UNDER NO CIRCUMSTANCES IS TO BE
CONSTRUED AS, AN OFFERING OF ANY RIGHTS EQUITY SHARES OR RIGHTS ENTITLEMENT
FOR SALE IN THE UNITED STATES OR AS A SOLICITATION THEREIN OF AN OFFER TO BUY
ANY OF THE RIGHTS EQUITY SHARES OR RIGHTS ENTITLEMENT. THERE IS NO INTENTION
TO REGISTER ANY PORTION OF THE ISSUE OR ANY OF THE SECURITIES DESCRIBED
HEREIN IN THE UNITED STATES OR TO CONDUCT A PUBLIC OFFERING OF SECURITIES IN
THE UNITED STATES. ACCORDINGLY, THIS ISSUE MATERIALS SHOULD NOT BE
FORWARDED TO OR TRANSMITTED IN OR INTO THE UNITED STATES AT ANY TIME.

Neither our Company, nor any person acting on behalf of our Company, will accept a subscription or renunciation
from any person, or the agent of any person, who appears to be, or who our Company, or any person acting on
behalf of our Company, has reason to believe is, in the United States when the buy order is made. Envelopes
containing an Application Form should not be postmarked in the United States or otherwise dispatched from the
United States or any other jurisdiction where it would be illegal to make an offer under this Letter of Offer. Our
Company is making this Issue on a rights basis to the Eligible Equity Shareholders and this Letter of Offer/
Abridged Letter of Offer, Application Form and the Rights Entitlement Letter will be dispatched to the Eligible
Equity Shareholders who have provided an Indian address to our Company. Any person who acquires the Rights
Entitlements and the Equity Shares will be deemed to have declared, represented, warranted and agreed, by
accepting the delivery of the Letter of Offer, (i) that it is not and that, at the time of subscribing for the Equity
Shares or the Rights Entitlements, it will not be, in the United States when the buy order is made; and (ii) is
authorised to acquire the Rights Entitlements and the Equity Shares in compliance with all applicable laws, rules
and regulations.

Our Company reserves the right to treat as invalid any Application Form which: (i) appears to our Company or
its agents to have been executed in or dispatched from the United States of America; (ii) does not include the
relevant certification set out in the Application Form headed "Overseas Shareholders" to the effect that the person
accepting and/or renouncing the Application Form does not have a registered address (and is not otherwise
located) in the United States, and such person is complying with laws of the jurisdictions applicable to such person
in connection with the Issue, among others; (iii) where our Company believes acceptance of such Application
Form may infringe applicable legal or regulatory requirements; or (iv) where a registered Indian address is not
provided, and our Company shall not be bound to allot or issue any Equity Shares or Rights Entitlement in respect
of any such Application Form.

None of the Rights Entitlements or the Equity Shares have been, or will be, registered under the United States
Securities Act of 1933, as amended (the "Securities Act"), or any state securities laws in the United States.
Accordingly, the Rights Entitlements and Equity Shares are being offered and sold only outside the United States
in compliance with Regulation S under the Securities Act and the applicable laws of the jurisdictions where those
offers, and sales are made.

NO OFFER IN ANY JURISDICTION OUTSIDE INDIA

NO OFFER OR INVITATION TO PURCHASE RIGHTS ENTITLEMENTS OR RIGHTS EQUITY

SHARES IS BEING MADE IN ANY JURISDICTION OUTSIDE OF INDIA, INCLUDING, BUT NOT
LIMITED TO AUSTRALIA, BAHRAIN, CANADA, THE EUROPEAN ECONOMIC AREA, GHANA,
HONG KONG, INDONESIA, JAPAN, KENYA, KUWAIT, MALAYSIA, NEW ZEALAND,
SULTANATE OF OMAN, PEOPLE'S REPUBLIC OF CHINA, QATAR, SINGAPORE, SOUTH

| 179 |
AFRICA, SWITZERLAND, THAILAND, THE UNITED ARAB EMIRATES, THE UNITED KINGDOM
AND THE UNITED STATES. THE OFFERING TO WHICH THIS LETTER OF OFFER RELATES IS
NOT, AND UNDER NO CIRCUMSTANCES IS TO BE CONSTRUED AS, AN OFFERING OF ANY
RIGHTS EQUITY SHARES OR RIGHTS ENTITLEMENT FOR SALE IN ANY JURISDICTION
OUTSIDE INDIA OR AS A SOLICITATION THEREIN OF AN OFFER TO BUY ANY OF THE SAID
SECURITIES. ACCORDINGLY, THIS LETTER OF OFFER SHOULD NOT BE FORWARDED TO OR
TRANSMITTED IN OR INTO ANY OTHER JURISDICTION AT ANY TIME.

Consents

Consents in writing of our Directors, the Registrar to the Issue and the Bankers to the Issue/ Refund Bank to act
in their respective capacities, have been obtained and such consents have not been withdrawn up to the date of
this Letter of Offer.

Expert Opinion

Our Company has received written consent dated July 12, 2024 from our Statutory Auditor to include their name
as required in this Letter of Offer and as an ‘expert’ as defined under Section 2(38) of the Companies Act, 2013
in relation to its examination report, dated June 27, 2024on the Restated Financial Information and the Statement
of Tax Benefits dated August 21, 2024and such consent has not been withdrawn as of the date of this Letter of
Offer. The term ‘expert’ and consent thereof, does not represent an expert or consent within the meaning under
the U.S. Securities Act.

Except for the abovementioned documents, provided by our Auditors, our Company has not obtained any expert
opinions.

Performance vis-à-vis objects – Public/Rights Issue of our Company

Our Company has not made any public issues during last one year immediately preceding the date of this Letter
of Offer. There have been no instances in the past, wherein our Company has failed to achieve the objects in its
previous issues.

Performance vis-à-vis objects – Last issue of listed Subsidiaries or Associates

As on date of filing of this Letter of Offer, our Company does not have any Subsidiaries.

Stock Market Data of the Equity Shares

Our Equity Shares are listed on BSE and CSE. Our Equity Shares are traded on BSE and CSE. For details in
connection with the stock market data of the Stock Exchanges, please refer to the chapter titled "Market Price
Information" beginning on page 169 of this Letter of Offer

Filing

SEBI vide the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) (Fourth
Amendment) Regulations, 2020 has amended Regulation 3(b) of the SEBI ICDR Regulations as per which the
threshold of filing of Draft Letter of Offer with SEBI for rights issues has been increased. The threshold of the
rights issue size under Regulation 3 (b) of the SEBI ICDR Regulations has been increased from Rupees ten crores
to Rupees fifty crores. Since the size of this Issue falls below this threshold, the Draft Letter of Offer has been
filed with the Stock Exchanges and not with SEBI. However, the Letter of Offer has been submitted with SEBI
for information and dissemination and have also been filed with the Stock Exchanges.

Mechanism for Redressal of Investor Grievances

Our Company has adequate arrangements for redressal of investor grievances in compliance with the SEBI Listing
Regulations. We have been registered with the SEBI Complaints Redress System (SCORES) as required by the
SEBI Circular no. CIR/OIAE/2/2011 dated June 3, 2011. Consequently, investor grievances are tracked online by
our Company.

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Our Company has a Stakeholders Relationship Committee which meets at least once a year and as and when
required. Its terms of reference include considering and resolving grievances of Shareholders in relation to transfer
of shares and effective exercise of voting rights.

Purva Sharegistry (India) Private Limited is our Registrar and Share Transfer Agent. All investor grievances
received by us have been handled by the Registrar and Share Transfer Agent in consultation with the Company
Secretary and Compliance Officer.

Investor complaints received by our Company are typically disposed of within 15 days from the receipt of the
complaint.

Investors may contact the Registrar or our Company Secretary and Compliance Officer for any pre-Issue
or post-Issue related matter. All grievances relating to the ASBA process may be addressed to the Registrar,
with a copy to the SCSBs (in case of ASBA process), giving full details such as name, address of the
Applicant, contact number(s), e mail address of the sole/ first holder, folio number or demat account
number, number of Equity Shares applied for, amount blocked (in case of ASBA process), ASBA Account
number and the Designated Branch of the SCSBs where the Application Form or the plain paper
application, as the case may be, was submitted by the Investors along with a photocopy of the
acknowledgement slip (in case of ASBA process). For details on the ASBA process, see "Terms of the Issue"
beginning on page 182 of this Letter of Offer. The contact details of Registrar to the Issue and our Company
Secretary and Compliance Officer are as follows:

Registrar to the Company:

Purva Sharegistry (India) Private Limited

Unit No. 9 Shiv Shakti Industrial Estate,
J.R. Boricha marg, Lower Parel (E),
Mumbai – 400 011
Telephone: 022-3522 0056 / 4961 4132
Email: newissue@purvashare.com
Website: https://www.purvashare.com/
Investor grievance e-mail: newissue@purvashare.com
Contact Person: Deepali Dhuri
SEBI Registration No.: INR000001112

Investors may contact the Company Secretary and Compliance Officer at the below mentioned address for any
pre-Issue/post-Issue related matters such as non-receipt of Letters of Allotment/share certificates/demat credit/
Refund Orders etc.

Ruchi Nishar, is the Company Secretary and Compliance Officer of our Company. Her contact details are set forth
hereunder:

Ruchi Nishar
705/706, Hallmark Business Plaza
Sant Dnyaneshwar Marg
Opp. Gurunanak Hospital
Bandra (E), Mumbai – 400 051 Telephone: 022-69165100
E- mail: compliance@purplefinance.in

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 SECTION VII – ISSUE INFORMATION

TERMS OF THE ISSUE

This section is for the information of the Investors proposing to apply in the Issue. Investors should carefully read
the provisions contained in this Letter of Offer, the Abridged Letter of Offer, the Rights Entitlement Letter and
the Application Form, before submitting the Application Form. Our Company and the Lead Manager are not
liable for any amendments or modifications or changes in applicable laws or regulations, which may occur after
the date of this Letter of Offer. Investors are advised to make an independent investigation and ensure that the
Application Form is accurately filled up in accordance with instructions provided therein and this Letter of Offer.
Unless otherwise permitted under the SEBI ICDR Regulations read with the SEBI Rights Issue Circulars,
Investors proposing to apply in the Issue can apply only through ASBA or by mechanism as disclosed in this
Letter of Offer.

Investors are requested to note that application in the Issue can only be made through ASBA or any other mode
which may be notified by SEBI.

OVERVIEW

The Rights Entitlement on the Equity Shares, the ownership of which is currently under dispute and including
any court proceedings or are currently under transmission or are held in a demat suspense account and for which
our Company has withheld the dividend, shall be held in abeyance and the Application Form along with the Rights
Entitlement Letter in relation to these Rights Entitlements shall not be dispatched pending resolution of the dispute
or court proceedings or completion of the transmission or pending their release from the demat suspense account.
On submission of such documents /records confirming the legal and beneficial ownership of the Securities with
regard to these cases on or prior to the Issue Closing Date, to the satisfaction of our Company, our Company shall
make available the Rights Entitlement on such Equity Shares to the identified Eligible Equity Shareholder. The
identified Eligible Equity Shareholder shall be entitled to subscribe to the Rights Equity Shares pursuant to the
Issue during the Issue Period with respect to these Rights Entitlement and subject to the same terms and conditions
as the Eligible Equity Shareholder.

The Issue is proposed to be undertaken on a rights basis and is subject to the terms and conditions contained in
this Letter of Offer, the Abridged Letter of Offer, the Rights Entitlement Letter, the Application Form, and the
Memorandum of Association and the Articles of Association of our Company, the provisions of the Companies
Act, 2013, the FEMA, the FEMA Rules, the SEBI ICDR Regulations, the SEBI LODR Regulations and the
guidelines, notifications, circulars and regulations issued by SEBI, the RBI, the Government of India and other
statutory and regulatory authorities from time to time, approvals, if any, from RBI or other regulatory authorities,
the terms of the Listing Agreements entered into by our Company with Stock Exchanges and the terms and
conditions as stipulated in the Allotment Advice.

I. DISPATCH AND AVAILABILITY OF ISSUE MATERIALS

In accordance with the SEBI ICDR Regulations and SEBI Rights Issue Circulars, the Abridged Letter
of Offer, the Application Form, the Rights Entitlement Letter and other Issue material will be sent/
dispatched only to the Eligible Equity Shareholders who have provided their Indian address to our
Company and who are located in jurisdictions where the offer and sale of the Rights Entitlement or
Rights Equity Shares is permitted under laws of such jurisdiction and does not result in and may not be
construed as, a public offering in such jurisdictions. In case such Eligible Equity Shareholders have
provided their valid e-mail address, the Abridged Letter of Offer, the Application Form, the Rights
Entitlement Letter and other Issue material will be sent only to their valid e-mail address and in case
such Eligible Equity Shareholders have not provided their e-mail address, then the Abridged Letter of
Offer, the Application Form, the Rights Entitlement Letter and other Issue material will be physically
dispatched, on a reasonable effort basis, to the Indian addresses provided by them. Further, this Letter
of Offer will be sent/ dispatched to the Eligible Equity Shareholders who have provided Indian address
and who have made a request in this regard. In case such Eligible Equity Shareholders have provided
their valid e-mail address, the Letter of Offer will be sent only to their valid e-mail address and in case
such Eligible Equity Shareholders have not provided their e-mail address, then the Letter of Offer will

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be dispatched, on a reasonable effort basis, to the Indian addresses provided by them.

Investors can access this Letter of Offer, the Abridged Letter of Offer and the Application Form
(provided that the Eligible Equity Shareholder is eligible to subscribe for the Rights Equity Shares under
applicable laws) on the websites of:
(i) our Company at; www.purplefinance.in/
(ii) the Registrar at www.purvashare.com/
(iii) the Lead Manager at www.markcorporateadvisors.com; and
(iv) the Stock Exchanges at https://www.bseindia.com/ and www.cse-india.com/

In case the Eligible Equity Shareholders have provided their valid e-mail address, the Letter of Offer
will be sent only to their valid e-mail address and in case such Eligible Equity Shareholders have not
provided their e-mail address, then the Letter of Offer will be dispatched, on a reasonable effort basis,
to the Indian addresses provided by them.

Eligible Equity Shareholders can also obtain the details of their respective Rights Entitlements from the
website of the Registrar (i.e. https://www.purvashare.com/) by entering their DP ID and Client ID or
folio number (for Eligible Equity Shareholders who hold Equity Shares in physical form as on Record
Date) and PAN. The link for the same shall also be available on the website of our Company (i.e.
www.purplefinance.in/).

Further, our Company along with the Lead Manager will undertake all adequate steps to reach out the
Eligible Equity Shareholders who have provided their Indian address through other means, as may be
feasible.

Please note that neither our Company nor the Registrar nor the Lead Manager shall be responsible
for not sending the physical copies of Issue materials, including this Letter of Offer, the Abridged
Letter of Offer, the Rights Entitlement Letter and the Application Form or delay in the receipt of
this Letter of Offer, the Abridged Letter of Offer, the Rights Entitlement Letter or the Application
Form attributable to non-availability of the email addresses of Eligible Equity Shareholders or
electronic transmission delays or failures, or if the Application Forms or the Rights Entitlement
Letters are delayed or misplaced in the transit.

The distribution of the Letter of Offer, Abridged Letter of Offer, the Rights Entitlement Letter and the
issue of Rights Equity Shares on a rights basis to persons in certain jurisdictions outside India is restricted
by legal requirements prevailing in those jurisdictions. No action has been, or will be, taken to permit
the Issue in any jurisdiction where action would be required for that purpose, except that this Letter of
Offer is being filed with the Stock Exchanges. Accordingly, the Rights Entitlements and Rights Equity
Shares may not be offered or sold, directly or indirectly, and this Letter of Offer, the Abridged Letter of
Offer, the Rights Entitlement Letter, the Application Form or any Issue related materials or
advertisements in connection with the Issue may not be distributed, in any jurisdiction, except in
accordance with and as permitted under the legal requirements applicable in such jurisdiction. Receipt
of this Letter of Offer, the Abridged Letter of Offer, the Rights Entitlement Letter or the Application
Form (including by way of electronic means) will not constitute an offer, invitation to or solicitation by
anyone in any jurisdiction or in any circumstances in which such an offer, invitation or solicitation is
unlawful or not authorised or to any person to whom it is unlawful to make such an offer, invitation or
solicitation. In those circumstances, this Letter of Offer, the Abridged Letter of Offer, the Rights
Entitlement Letter or the Application Form must be treated as sent for information only and should not
be acted upon for making an Application and should not be copied or re-distributed.

Accordingly, persons receiving a copy of the Letter of Offer, the Abridged Letter of Offer, the Rights
Entitlement Letter or the Application Form should not, in connection with the issue of the Rights Equity
Shares or the Rights Entitlements, distribute or send the Letter of Offer, the Abridged Letter of Offer,
the Rights Entitlement Letter or the Application Form in or into any jurisdiction where to do so, would,
or might, contravene local securities laws or regulations or would subject our Company or its affiliates
or the Lead Manager or their respective affiliates to any filing or registration requirement (other than in
India). If the Letter of Offer, the Abridged Letter of Offer, the Rights Entitlement Letter or the
Application Form is received by any person in any such jurisdiction, or by their agent or nominee, they

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 must not seek to make an Application or acquire the Rights Entitlements referred to in the Letter of
Offer, the Abridged Letter of Offer, the Rights Entitlement Letter or the Application Form.

Any person who makes an application to acquire Rights Entitlements and the Rights Equity Shares
offered in the Issue will be deemed to have declared, represented and warranted that such person is
authorized to acquire the Rights Entitlements and the Rights Equity Shares in compliance with all
applicable laws and regulations prevailing in such person’s jurisdiction and India, without requirement
for our Company or our affiliates or the Lead Manager or their respective affiliates to make any filing
or registration (other than in India).

NO OFFER IN THE UNITED STATES

THE RIGHTS ENTITLEMENTS AND THE RIGHTS EQUITY SHARES HAVE NOT BEEN
AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT AND MAY NOT BE
OFFERED OR SOLD WITHIN THE UNITED STATES, EXCEPT PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE U.S. SECURITIES ACT AND APPLICABLE STATE SECURITIES
LAWS. ACCORDINGLY, THE RIGHTS ENTITLEMENTS (INCLUDING THEIR CREDIT)
AND THE RIGHTS EQUITY SHARES ARE ONLY BEING OFFERED AND SOLD OUTSIDE
THE UNITED STATES IN “OFFSHORE TRANSACTIONS” AS DEFINED IN AND IN
RELIANCE ON REGULATION S UNDER THE U.S. SECURITIES ACT AND THE
APPLICABLE LAWS OF THE JURISDICTION WHERE THOSE OFFERS AND SALES
OCCUR.

Neither our Company, nor any person acting on behalf of our Company, will accept a subscription or
renunciation from any person, or the agent of any person, who appears to be, or who our Company, or
any person acting on behalf of our Company, has reason to believe is, in the United States when the buy
order is made. No Application Form should be postmarked in the United States or otherwise dispatched
from the United States or any other jurisdiction where it would be illegal to make an offer under the
Letter of Offer or where any action would be required to be taken to permit the Issue. Our Company is
undertaking this Issue on a rights basis to the Eligible Equity Shareholders and will dispatch the Letter
of Offer or the Abridged Letter of Offer and Application Form only to Eligible Equity Shareholders who
have provided an Indian address to our Company.

Any person who acquires Rights Entitlements or Rights Equity Shares will be deemed to have
represented, warranted and agreed, by accepting the delivery of this Letter of Offer, that it is not and that
at the time of subscribing for the Rights Equity Shares or the Rights Entitlements, it will not be, in the
United States and is authorized to acquire the Rights Entitlement and the Rights Equity Shares in
compliance with all applicable laws and regulations.

Our Company is undertaking the Issue on a Rights basis to the Eligible Equity Shareholders and will
send the Letter of Offer, Abridged Letter of Offer, the Application Form and other applicable Issue
materials primarily to email addresses of Eligible Equity Shareholders who have provided a valid email
addresses and an Indian address to our Company.

This Letter of Offer is being provided, primarily through e-mail, by the Registrar on behalf of our
Company or the Lead Manager to the Eligible Equity Shareholders who have provided their Indian
addresses to our Company and who make a request in this regard.

II. PROCESS OF MAKING AN APPLICATION IN THE ISSUE

In accordance with Regulation 76 of the SEBI ICDR Regulations, the SEBI Rights Issue Circulars,
all Investors desiring to make an Application in the Issue are mandatorily required to use the
ASBA process. Investors should carefully read the provisions applicable to such Applications
before making their Application through ASBA.

The Application Form can be used by the Eligible Equity Shareholders as well as the Renouncees, to
make Applications in the Issue basis the Rights Entitlement credited in their respective demat accounts

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 or demat suspense escrow account, as applicable. For further details on the Rights Entitlements and
demat suspense escrow account, see “Terms of Issue - Credit of Rights Entitlements in demat accounts
of Eligible Equity Shareholders” on page 195 of this Letter of Offer.

Please note that one single Application Form shall be used by Investors to make Applications for all
Rights Entitlements available in a particular demat account or entire respective portion of the Rights
Entitlements in the demat suspense escrow account in case of resident Eligible Equity Shareholders
holding shares in physical form as on Record Date and applying in the Issue, as applicable. In case of
Investors who have provided details of demat account in accordance with the SEBI ICDR Regulations,
such Investors will have to apply for the Rights Equity Shares from the same demat account in which
they are holding the Rights Entitlements and in case of multiple demat accounts, the Investors are
required to submit a separate Application Form for each demat account.

a) Facilities for Application in this Issue:

ASBA facility

Investors may apply for the Rights Equity Shares by submitting the Application Form to the Designated
Branch of the SCSB or online/electronic Application through the website of the SCSBs (if made
available by such SCSB) for authorising such SCSB to block Application Money payable on the
Application in their respective ASBA Accounts.

Investors are also advised to ensure that the Application Form is correctly filled in, stating therein the
ASBA Account in which an amount equivalent to the amount payable on Application as stated in the
Application Form will be blocked by the SCSB. For details, please refer to Paragraph titled "Terms of
Issue- Procedure for Application through the ASBA process" beginning on page 186 of this Letter of
Offer.

Applicants should note that they should very carefully fill-in their depository account details and PAN
in the Application Form or while submitting application through online/electronic Application through
the website of the SCSBs (if made available by such SCSB). Please note that incorrect depository
account details or PAN or Application Forms without depository account details shall be treated as
incomplete and shall be rejected. For details, see “- Grounds for Technical Rejection” on page 191 of
this Letter of Offer.

Our Company, the Lead Manager, the Registrar and the SCSBs shall not be liable for any incomplete or
incorrect demat details provided by the Applicants.

Additionally, in terms of Regulation 78 of the SEBI ICDR Regulations, Investors may choose to accept
the offer to participate in the Issue by making plain paper Applications. Please note that SCSBs shall
accept such applications only if all details required for making the application as per the SEBI ICDR
Regulations are specified in the plain paper application and that Eligible Equity Shareholders making an
application in the Issue by way of plain paper applications shall not be permitted to renounce any portion
of their Rights Entitlements. For details, see “- Making of an Application by Eligible Equity
Shareholders on Plain Paper under ASBA process” on page 187 of this Letter of Offer.

• Options available to the Eligible Equity Shareholders

The Rights Entitlement Letter will clearly indicate the number of Rights Equity Shares that the Eligible
Equity Shareholder is entitled to. Details of each of the Eligible Equity Shareholders’ Rights Entitlement
will be sent to the Eligible Equity shareholder separately along with the Application Form and would
also be available on the website of the Registrar to the Issue at www.purvashare.com/ and link of the
same would also be available on the website of our Company at www.purplefinance.in/ Respective
Eligible Equity Shareholder can check their entitlement by keying their requisite details therein.

If the Eligible Equity Shareholder applies in the Issue, then such Eligible Equity Shareholder can:
1. apply for its Rights Equity Shares to the full extent of its Rights Entitlements; or
2. apply for its Rights Equity Shares to the extent of part of its Rights Entitlements (without

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 renouncing the other part); or
3. apply for Rights Equity Shares to the extent of part of its Rights Entitlements and renounce the
other part of its Rights Entitlements; or
4. apply for its Rights Equity Shares to the full extent of its Rights Entitlements and apply for
Additional Rights Equity Shares; or
5. renounce its Rights Entitlements in full.

Making of an Application through the ASBA process

An Investor, wishing to participate in the Issue through the ASBA facility, is required to have an ASBA
enabled bank account with SCSBs, prior to making the Application. Investors desiring to make an
Application in the Issue through ASBA process, may submit the Application Form in physical mode to
the Designated Branches of the SCSB or online/ electronic Application through the website of the SCSBs
(if made available by such SCSB) for authorizing such SCSB to block Application Money payable on
the Application in their respective ASBA Accounts.

Investors should ensure that they have correctly submitted the Application Form and have provided an
authorisation to the SCSB, via the electronic mode, for blocking funds in the ASBA Account equivalent
to the Application Money mentioned in the Application Form, as the case may be, at the time of
submission of the Application.

For the list of banks which have been notified by SEBI to act as SCSBs for the ASBA process, please
refer to www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes&intmId=34. Please
note that subject to SCSBs complying with the requirements of the SEBI circular bearing reference
number CIR/CFD/DIL/13/2012 dated September 25, 2012, within the periods stipulated therein,
Applications may be submitted at the Designated Branches of the SCSBs. Further, in terms of the SEBI
circular bearing reference number CIR/CFD/DIL/1/2013 dated January 2, 2013, it is clarified that for
making Applications by SCSBs on their own account using ASBA facility, each such SCSB should have
a separate account in its own name with any other SEBI registered SCSB(s). Such account shall be used
solely for the purpose of making an Application in the Issue and clear demarcated funds should be
available in such account for such an Application.

The Lead Manager, our Company, the directors, employees, affiliates, associates and their respective
directors and officers and the Registrar shall not take any responsibility for acts, mistakes, errors,
omissions and commissions etc., in relation to Applications accepted by SCSBs, Applications uploaded
by SCSBs, Applications accepted but not uploaded by SCSBs or Applications accepted and uploaded
without blocking funds in the ASBA Accounts.

Investors applying through the ASBA facility should carefully read the provisions applicable to such
Applications before making their Application through the ASBA process.

Do’s:
(a) Ensure that the necessary details are filled in on the Application Form including the details of the ASBA
Account.
(b) Ensure that the details about your Depository Participant, PAN and beneficiary account are correct and
the beneficiary account is activated as the Rights Equity Shares will be Allotted in the dematerialized
form only.
(c) Ensure that the Applications are submitted to the Designated Branch of the SCSBs and details of the
correct bank account have been provided in the Application.
(d) Ensure that there are sufficient funds (equal to {number of Rights Equity Shares (including Additional
Rights Equity Shares) applied for} X {Application Money of Rights Equity Shares}) available in ASBA
Account mentioned in the Application Form before submitting the Application to the respective
Designated Branch of the SCSB.
(e) Ensure that you have authorised the SCSB for blocking funds equivalent to the total amount payable on
application mentioned in the Application Form, in the ASBA Account, of which details are provided in
the Application Form and have signed the same.
(f) Ensure that you have a bank account with SCSBs providing ASBA facility in your location and the
Application is made through that SCSB providing ASBA facility in such location.

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(g) Ensure that you receive an acknowledgement from the Designated Branch of the SCSB for your
submission of the Application Form in physical form or plain paper Application.
(h) Ensure that the name(s) given in the Application Form is exactly the same as the name(s) in which the
beneficiary account is held with the Depository Participant. In case the Application Form is submitted
in joint names, ensure that the beneficiary account is also held in same joint names and such names are
in the same sequence in which they appear in the Application Form and the Rights Entitlement Letter.
(i) Ensure that your PAN is linked with Aadhaar, and you are in compliance with CBDT notification dated
Feb 13, 2020 read with press release dated June 25, 2021 and September 17, 2021.

Don’ts:
(a) Do not apply if you are not eligible to participate in the Issue under the securities laws applicable to your
jurisdiction.
(b) Do not submit the Application Form after you have submitted a plain paper Application to a Designated
Branch of the SCSB or vice versa.
(c) Do not send your physical Application to the Lead Manager, the Registrar, the Banker to the Issue, a
branch of the SCSB which is not a Designated Branch of the SCSB or our Company; instead submit the
same to a Designated Branch of the SCSB only.
(d) Do not instruct the SCSBs to unblock the funds blocked under the ASBA process upon making the
Application.
(e) Do not submit Application Form using third party ASBA account.
(f) Avoid applying on the Issue Closing Date due to risk of delay/ restrictions in making any physical
Application.
(g) Do not submit multiple Applications.
(h) Do not submit the GIR number instead of the PAN as the application is liable to be rejected on this
ground.
(i) Do not pay the Application Money in cash, by money order, pay order or postal order.

Making of an Application by Eligible Equity Shareholders on Plain Paper under ASBA process

An Eligible Equity Shareholder in India who is eligible to apply under the ASBA process may make an
Application to subscribe to the Issue on plain paper in case of non-receipt of Application Form as detailed above
and only such plain paper applications which provide all the details required in terms of Regulation 78 of SEBI
ICDR Regulations shall be accepted by SCSBs. In such cases of non-receipt of the Application Form through
physical delivery (where applicable) and the Eligible Equity Shareholder not being in a position to obtain it from
any other source may make an Application to subscribe to the Issue on plain paper with the same details as per
the Application Form that is available on the website of the Registrar, the Stock Exchanges or the Lead Manager.

An Eligible Equity Shareholder shall submit the plain paper Application to the Designated Branch of the SCSB
for authorising such SCSB to block Application Money in the said bank account maintained with the same SCSB.
Applications on plain paper will not be accepted from any Eligible Equity Shareholder who has not provided an
Indian address.

Please note that the Eligible Equity Shareholders who are making the Application on plain paper shall not be
entitled to renounce their Rights Entitlements and should not utilize the Application Form for any purpose
including renunciation even if it is received subsequently. The Application on plain paper, duly signed by the
Eligible Equity Shareholder including joint holders, in the same order and as per specimen recorded with his/her
bank, must reach the office of the Designated Branch of the SCSB before the Issue Closing Date and should
contain the following particulars:
1. Name of our Company, being Purple Finance Limited;
2. Name and address of the Eligible Equity Shareholder including joint holders (in the same order and as
per specimen recorded with our Company or the Depository);
3. Folio number (in case of Eligible Equity Shareholders who hold Equity Shares in physical form as on
Record Date)/DP and Client ID;
4. Except for Applications on behalf of the Central or State Government, the residents of Sikkim and the
officials appointed by the courts, PAN of the Eligible Equity Shareholder and for each Eligible Equity
Shareholder in case of joint names, irrespective of the total value of the Equity Shares applied for
pursuant to the Issue;
5. Number of Equity Shares held as on Record Date;

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6. Allotment option – only dematerialised form;
7. Number of Rights Equity Shares entitled to;
8. Number of Rights Equity Shares applied for within the Rights Entitlements;
9. Number of Additional Rights Equity Shares applied for, if any (applicable only if entire Rights
Entitlements have been applied for);
10. Total number of Rights Equity Shares applied for;
11. Total amount paid at the rate of ₹ 40/- per Rights Equity Share;
12. Details of the ASBA Account such as the SCSB account number, name, address and branch of the
relevant SCSB;
13. In case of non-resident Eligible Equity Shareholders making an application with an Indian address,
details of the NRE / FCNR/ NRO account such as the account number, name, address and branch of the
SCSB with which the account is maintained;
14. Authorisation to the Designated Branch of the SCSB to block an amount equivalent to the Application
Money in the ASBA Account;
15. Signature of the Eligible Equity Shareholder (in case of joint holders, to appear in the same sequence
and order as they appear in the records of the SCSB); and
16. All such Eligible Equity Shareholders shall be deemed to have made the representations, warranties and
agreements set forth in “Restrictions on Foreign Ownership of Indian Securities” on page 209, of this
Letter of Offer and shall include the following:

“I/ We hereby make representations, warranties and agreements set forth in “Restrictions on Foreign
Ownership of Indian Securities” on page 209 of this Letter of Offer.

I/ We acknowledge that the Company, the Lead Manager, its affiliates and others will rely upon the truth
and accuracy of the representations, warranties and agreements set forth therein.”

In cases where Multiple Application Forms are submitted for Applications pertaining to Rights Entitlements
credited to the same demat account or in demat suspense escrow account, as applicable, including cases where an
Investor submits Application Forms along with a plain paper Application, such Applications shall be liable to be
rejected.

Investors are requested to strictly adhere to these instructions. Failure to do so could result in an Application being
rejected, with our Company, the Lead Manager and the Registrar not having any liability to the Investor. The
plain paper Application format will be available on the website of the Registrar at www.purvashare.com/.

Our Company, the Lead Manager and the Registrar shall not be responsible if the Applications are not uploaded
by the SCSB or funds are not blocked in the Investors’ ASBA Accounts on or before the Issue Closing Date.

Making of an Application by Eligible Equity Shareholders holding Equity Shares in physical form

Please note that in accordance with Regulation 77A of the SEBI ICDR Regulations read with the SEBI Rights
Issue Circulars, the credit of Rights Entitlements and Allotment of Rights Equity Shares shall be made in
dematerialised form only. Accordingly, Eligible Equity Shareholders holding Equity Shares in physical form as
on Record Date and desirous of subscribing to Rights Equity Shares in the Issue are advised to furnish the details
of their demat account to the Registrar or our Company at least two clear Working Days prior to the Issue Closing
Date, to enable the credit of their Rights Entitlements in their respective demat accounts at least one day before
the Issue Closing Date.

Prior to the Issue Opening Date, the Rights Entitlements of those Eligible Equity Shareholders, among others,
who hold Equity Shares in physical form, and whose demat account details are not available with our Company
or the Registrar, shall be credited in a demat suspense escrow account opened by our Company.

Eligible Equity Shareholders, who hold Equity Shares in physical form as on Record Date and who have opened
their demat accounts after the Record Date, shall adhere to following procedure for participating in the Issue:
(a) The Eligible Equity Shareholders shall send a letter to the Registrar containing the name(s), address, e-
mail address, contact details and the details of their demat account along with copy of self-attested PAN
and self- attested client master sheet of their demat account either by e-mail, post, speed post, courier,

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 or hand delivery so as to reach to the Registrar no later than two clear Working Days prior to the Issue
Closing Date;
(b) The Registrar shall, after verifying the details of such demat account, transfer the Rights Entitlements of
such Eligible Equity Shareholders to their demat accounts at least one day before the Issue Closing Date;
(c) The remaining procedure for Application shall be same as set out in “- Making of an Application by
Eligible Equity Shareholders on Plain Paper under ASBA process” on page 187 of this Letter of Offer.

In accordance with the SEBI Rights Issue Circulars, Resident Eligible Equity Shareholders who hold Equity
Shares in physical form as on the Record Date will not be allowed to renounce their Rights Entitlements in the
Issue. However, such Eligible Equity Shareholders, where the dematerialized Rights Entitlements are transferred
from the suspense escrow demat account to the respective demat accounts within prescribed timelines, can apply
for Additional Rights Equity Shares while submitting the Application through ASBA process.

PLEASE NOTE THAT THE ELIGIBLE EQUITY SHAREHOLDERS, WHO HOLD EQUITY SHARES
IN PHYSICAL FORM AS ON RECORD DATE AND WHO HAVE NOT FURNISHED THE DETAILS
OF THEIR RESPECTIVE DEMAT ACCOUNTS TO THE REGISTRAR OR OUR COMPANY AT
LEAST TWO WORKING DAYS PRIOR TO THE ISSUE CLOSING DATE, SHALL NOT BE
ELIGIBLE TO MAKE AN APPLICATION FOR RIGHTS EQUITY SHARES AGAINST THEIR
RIGHTS ENTITLEMENTS WITH RESPECT TO THE EQUITY SHARES HELD IN PHYSICAL
FORM.

Application for Additional Rights Equity Shares

Investors are eligible to apply for Additional Rights Equity Shares over and above their Rights Entitlements,
provided that they are eligible to apply for Equity Shares under applicable law and they have applied for all the
Rights Equity Shares forming part of their Rights Entitlements without renouncing them in whole or in part.
Where the number of Additional Rights Equity Shares applied for exceeds the number available for Allotment,
the Allotment would be made as per the Basis of Allotment finalised in consultation with the Designated Stock
Exchange. Applications for Additional Rights Equity Shares shall be considered, and Allotment shall be made in
accordance with the SEBI ICDR Regulations and in the manner as set out in “-Basis of Allotment” on page 203
of this Letter of Offer.

Eligible Equity Shareholders who renounce their Rights Entitlements in full or part, cannot apply for
Additional Rights Equity Shares. Non-resident Renouncees who are not Eligible Equity Shareholders
cannot apply for Additional Rights Equity Shares.

Investors to kindly note that after purchasing the Rights Entitlements through on market renunciation / off market
renunciation, an application has to be made for subscribing to the rights equity shares. If no such application is
made by the renouncee on or before issue closing date, then such rights entitlements will get lapsed and shall be
extinguished after the issue closing date and no rights equity shares for such lapsed Rights Entitlements will be
credited. For procedure of application by shareholders who have purchased the right entitlement through on
market renunciation / off market renunciation, please refer to the heading titled “Process of making an
application in the issue” on page 184 of this Letter of Offer.

Additional general instructions for Investors in relation to making of an Application

(a) Please read this Letter of Offer carefully to understand the Application process and applicable settlement
process.
(b) Please read the instructions on the Application Form sent to you. Application should be complete in all
respects. The Application Form found incomplete with regard to any of the particulars required to be
given therein, and/or which are not completed in conformity with the terms of this Letter of Offer, the
Abridged Letter of Offer, the Rights Entitlement Letter and the Application Form are liable to be
rejected. The Application Form must be filled in English.
(c) In case of non-receipt of Application Form, Application can be made on plain paper mentioning all
necessary details as mentioned under “Making of an Application by Eligible Equity Shareholders on
Plain Paper under ASBA process” on page 187 of this Letter of Offer.
(d) Applications should be submitted to the Designated Branch of the SCSB or made online/electronic
through the website of the SCSBs (if made available by such SCSB) for authorising such SCSB to block

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 Application Money payable on the Application in their respective ASBA Accounts. Please note that on
the Issue Closing Date, Applications through ASBA process will be uploaded until 5.00 p.m. (Indian
Standard Time) or such extended time as permitted by the Stock Exchanges.
(e) Applications should not be submitted to the Banker to the Issue, our Company or the Registrar or the
Lead Manager.
(f) All Applicants, and in the case of Application in joint names, each of the joint Applicants, should
mention their PAN allotted under the Income-tax Act, irrespective of the amount of the Application.
Except for Applications on behalf of the Central or the State Government, the residents of Sikkim and
the officials appointed by the courts, Applications without PAN will be considered incomplete and are
liable to be rejected. With effect from August 16, 2010, the demat accounts for Investors for which PAN
details have not been verified shall be “suspended for credit” and no Allotment and credit of Rights
Equity Shares pursuant to the Issue shall be made into the accounts of such Investors.
(g) Ensure that the demographic details such as address, PAN, DP ID, Client ID, folio number, bank account
details and occupation (“Demographic Details”) are updated, true and correct, in all respects. Investors
applying under the Issue should note that on the basis of name of the Investors, DP ID and Client ID
provided by them in the Application Form or the plain paper Applications, as the case may be, the
Registrar will obtain Demographic Details from the Depository. Therefore, Investors applying under the
Issue should carefully fill in their Depository Account details in the Application. These Demographic
Details would be used for all correspondence with such Investors including mailing of the letters
intimating unblocking of bank account of the respective Investor and/or refund. The Demographic
Details given by the Investors in the Application Form would not be used for any other purposes by the
Registrar. Hence, Investors are advised to update their Demographic Details as provided to their
Depository Participants. The Allotment Advice and the intimation on unblocking of ASBA Account or
refund (if any) would be mailed to the address of the Investor as per the Indian address provided to our
Company or the Registrar or Demographic Details received from the Depositories. The Registrar will
give instructions to the SCSBs for unblocking funds in the ASBA Account to the extent Rights Equity
Shares are not Allotted to such Investor. Please note that any such delay shall be at the sole risk of the
Investors and none of our Company, the SCSBs, Registrar or the Lead Manager shall be liable to
compensate the Investor for any losses caused due to any such delay or be liable to pay any interest for
such delay. In case no corresponding record is available with the Depositories that match three
parameters, (a) names of the Investors (including the order of names of joint holders), (b) DP ID, and (c)
Client ID, then such Application Forms are liable to be rejected.
(h) By signing the Application Forms, Investors would be deemed to have authorised the Depositories to
provide, upon request, to the Registrar, the required Demographic Details as available on its records.
(i) For physical Applications through ASBA at Designated Branches of SCSB, signatures should be either
in English or Hindi or in any other language specified in the Eighth Schedule to the Constitution of India.
Signatures other than in any such language or thumb impression must be attested by a Notary Public or
a Special Executive Magistrate under his/her official seal. The Investors must sign the Application as
per the specimen signature recorded with the SCSB.
(j) Investor will be solely responsible for any error or inaccurate detail provided in the Application. Our
Company, the Lead Manager, SCSBs or the Registrar will not be liable for any such rejections.
(k) In case of joint Applicants, reference, if any, will be made in the first Applicant’s name and all
communication will be addressed to the first Applicant.
(l) All communication in connection with Application for the Rights Equity Shares, including any change
in contact details of the Eligible Equity Shareholders should be addressed to the Registrar prior to the
date of Allotment in the Issue quoting the name of the first/sole Applicant, folio number (for Eligible
Equity Shareholders who hold Equity Shares in physical form as on Record Date)/DP ID and Client ID
and Application Form number, as applicable. In case of any change in contact details of the Eligible
Equity Shareholders, the Eligible Equity Shareholders should also send the intimation for such change
to the respective depository participant, or to our Company or the Registrar in case of Eligible Equity
Shareholders holding Equity Shares in physical form.
(m) Investors are required to ensure that the number of Rights Equity Shares applied for by them do not
exceed the prescribed limits under the applicable law.
(n) Avoid applying on the Issue Closing Date due to risk of delay/ restrictions in making any physical
Application.
(o) An Applicant being an OCB is required not to be under the adverse notice of RBI and in order to apply
for the Issue as an incorporated non-resident must do so in accordance with the FDI Policy and FEMA
Rules.

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(p) Ensure that your PAN is linked with Aadhaar and you are in compliance with CBDT notification dated
Feb 13, 2020 and press release dated June 25, 2021 and September 17, 2021.

Grounds for Technical Rejection

Applications made in the Issue are liable to be rejected on the following grounds:

(a) DP ID, folio number and Client ID mentioned in Application does not match with the DP ID, folio
number and Client ID records available with the Registrar.
(b) Details of PAN mentioned in the Application does not match with the PAN records available with the
Registrar.
(c) Sending an Application to our Company, the Lead Manager, Registrar, Banker to the Issue, to a branch
of a SCSB which is not a Designated Branch of the SCSB.
(d) Insufficient funds are available in the ASBA Account with the SCSB for blocking the Application
Money.
(e) Funds in the ASBA Account whose details are mentioned in the Application Form having been frozen
pursuant to regulatory orders.
(f) Account holder not signing the Application or declaration mentioned therein.
(g) Submission of more than one Application Form for Rights Entitlements available in a particular demat
account.
(h) Multiple Application Forms, including cases where an Investor submits Application Forms along with a
plain paper Application.
(i) Submitting the GIR number instead of the PAN (except for Applications on behalf of the Central or State
Government, the residents of Sikkim and the officials appointed by the courts).
(j) Applications by persons not competent to contract under the Indian Contract Act, 1872, except
Applications by minors having valid demat accounts as per the Demographic Details provided by the
Depositories.
(k) Applications by SCSB on own account, other than through an ASBA Account in its own name with any
other SCSB.
(l) Application Forms which are not submitted by the Investors within the time periods prescribed in the
Application Form and this Letter of Offer.
(m) Physical Application Forms not duly signed by the sole or joint Investors, as applicable.
(n) Application Forms accompanied by stock invest, outstation cheques, post-dated cheques, money order,
postal order or outstation demand drafts.
(o) If an Investor is (a) debarred by SEBI; or (b) if SEBI has revoked the order or has provided any interim
relief then failure to attach a copy of such SEBI order allowing the Investor to subscribe to their Rights
Entitlements.
(p) Applications which: (i) appears to our Company or its agents to have been executed in, electronically
transmitted from or dispatched from the United States (other than from persons in the United States who
are U.S. QIBs and “qualified purchasers” (as defined under the U.S. Investment Company Act of 1940,
as amended and referred to in this Letter of Offer as “QPs”) or other jurisdictions where the offer and
sale of the Equity Shares is not permitted under laws of such jurisdictions; (ii) does not include the
relevant certifications set out in the Application Form, including to the effect that the person submitting
and/or renouncing the Application Form is (a) both a U.S. QIB and a QP, if in the United States or a
U.S. Person or (b) outside the United States and is a non-U.S. Person, and in each case such person is
eligible to subscribe for the Equity Shares under applicable securities laws and is complying with laws
of jurisdictions applicable to such person in connection with this Issue; and our Company shall not be
bound to issue or allot any Equity Shares in respect of any such Application Form.
(q) Applications which have evidence of being executed or made in contravention of applicable securities
laws.
(r) Application from Investors that are residing in U.S. address as per the depository records (other than
from persons in the United States who are U.S. QIBs and QPs).
(s) Applicants not having the requisite approvals to make application in the Issue.
(t) IT IS MANDATORY FOR ALL THE INVESTORS APPLYING UNDER THIS ISSUE TO
APPLY THROUGH THE ASBA PROCESS, TO RECEIVE THEIR RIGHTS EQUITY SHARES
IN DEMATERIALISED FORM AND TO THE SAME DEPOSITORY ACCOUNT/
CORRESPONDING PAN IN WHICH THE EQUITY SHARES ARE HELD BY THE
INVESTOR AS ON THE RECORD DATE. ALL INVESTORS APPLYING UNDER THIS

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 ISSUE SHOULD MENTION THEIR DEPOSITORY PARTICIPANT’S NAME, DP ID AND
BENEFICIARY ACCOUNT NUMBER/ FOLIO NUMBER IN THE APPLICATION FORM.
INVESTORS MUST ENSURE THAT THE NAME GIVEN IN THE APPLICATION FORM IS
EXACTLY THE SAME AS THE NAME IN WHICH THE DEPOSITORY ACCOUNT IS HELD.
IN CASE THE APPLICATION FORM IS SUBMITTED IN JOINT NAMES, IT SHOULD BE
ENSURED THAT THE DEPOSITORY ACCOUNT IS ALSO HELD IN THE SAME JOINT
NAMES AND ARE IN THE SAME SEQUENCE IN WHICH THEY APPEAR IN THE
APPLICATION FORM OR PLAIN PAPER APPLICATIONS, AS THE CASE MAY BE.
(u) Investors applying under this Issue should note that on the basis of name of the Investors, Depository
Participant’s name and identification number and beneficiary account number provided by them in the
Application Form or the plain paper Applications, as the case may be, the Registrar will obtain
Demographic Details from the Depository. Hence, Investors applying under this Issue should carefully
fill in their Depository Account details in the Application.
(v) These Demographic Details would be used for all correspondence with such Investors including mailing
of the letters intimating unblocking of bank account of the respective Investor and/or refund. The
Demographic Details given by the Investors in the Application Form would not be used for any other
purposes by the Registrar. Hence, Investors are advised to update their Demographic Details as provided
to their Depository Participants. By signing the Application Forms, the Investors would be deemed to
have authorized the Depositories to provide, upon request, to the Registrar, the required Demographic
Details as available on its records.
(w) The Allotment advice and the email intimating unblocking of ASBA Account or refund (if any) would
be emailed to the address of the Investor as per the email address provided to our Company or the
Registrar or Demographic Details received from the Depositories. The Registrar will give instructions
to the SCSBs for unblocking funds in the ASBA Account to the extent Rights Equity Shares are not
allotted to such Investor. Please note that any such delay shall be at the sole risk of the Investors and
none of our Company, the SCSBs or the Registrar shall be liable to compensate the Investor for any
losses caused due to any such delay or be liable to pay any interest for such delay.
(x) In case no corresponding record is available with the Depositories that match three parameters, (a) names
of the Investors (including the order of names of joint holders), (b) the DP ID, and (c) the beneficiary
account number, then such Application Forms are liable to be rejected.
(y) Application forms supported by the amount blocked from a third-party bank account.

Multiple Applications

In case where multiple Applications are made using same demat account in respect of the same Rights
Entitlement, such Applications shall be liable to be rejected. A separate Application can be made in respect of
Rights Entitlements in each demat account of the Investors and such Applications shall not be treated as multiple
applications. Similarly, a separate Application can be made against Equity Shares held in dematerialized form
and Equity Shares held in physical form, and such Applications shall not be treated as multiple applications.
Further, additional applications in relation to additional Rights Equity Shares with/without using additional Rights
Entitlements will not be treated as multiple application. A separate Application can be made in respect of each
scheme of a mutual fund registered with SEBI and such Applications shall not be treated as multiple applications.
For details, see “- Procedure for Applications by Mutual Funds” on page 194 of this Letter of Offer.

In cases where Multiple Application Forms are submitted, including cases where (a) an Investor submits
Application Forms along with a plain paper Application or (b) multiple plain paper Applications (c) or multiple
applications through ASBA, such Applications shall be treated as multiple applications and are liable to be
rejected, other than multiple applications submitted by our Promoter to meet the minimum subscription
requirements applicable to the Issue as described in “General Information – Minimum Subscription” on page
43 of this Letter of Offer.

Procedure for Applications by certain categories of Investors

Procedure for Applications by FPIs

In terms of the SEBI FPI Regulations, the issue of Equity Shares to a single FPI or an investor group (which
means the multiple entities having common ownership, directly or indirectly, of more than 50% or common
control) must be below 10% of our post- Issue Equity Share capital. Further, in terms of FEMA Rules, the total

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holding by each FPI shall be below 10% of the total paid-up equity share capital of a company on a fully diluted
basis and the total holdings of all FPIs put together shall not exceed 24% of the paid-up equity share capital of a
company on a fully diluted basis.

Further, pursuant to the FEMA Rules the investments made by a SEBI registered FPI in a listed Indian company
will be reclassified as FDI if the total shareholding of such FPI increases to more than 10% of the total paid-up
equity share capital on a fully diluted basis or 10% or more of the paid-up value of each series of debentures or
preference shares or warrants.

FPIs are permitted to participate in the Issue subject to compliance with conditions and restrictions which may be
specified by the Government from time to time. FPIs who wish to participate in the Issue are advised to use the
Application Form for non-residents. Subject to compliance with all applicable Indian laws, rules, regulations,
guidelines and approvals in terms of Regulation 21 of the SEBI FPI Regulations, an FPI may issue, subscribe to
or otherwise deal in offshore derivative instruments (as defined under the SEBI FPI Regulations as any
instrument, by whatever name called, which is issued overseas by an FPI against securities held by it that are
listed or proposed to be listed on any recognised stock exchange in India, as its underlying) directly or indirectly,
only in the event (i) such offshore derivative instruments are issued only to persons registered as Category I FPI
under the SEBI FPI Regulations; (ii) such offshore derivative instruments are issued only to persons who are
eligible for registration as Category I FPIs (where an entity has an investment manager who is from the Financial
Action Task Force member country, the investment manager shall not be required to be registered as a Category
I FPI); (iii) such offshore derivative instruments are issued after compliance with ‘know your client’ norms; and
(iv) compliance with other conditions as may be prescribed by SEBI.

An FPI issuing offshore derivative instruments is also required to ensure that any transfer of offshore derivative
instruments issued by or on its behalf, is carried out subject to inter alia the following conditions: (a) such offshore
derivative instruments are transferred only to persons in accordance with the SEBI FPI Regulations; and (b) prior
consent of the FPI is obtained for such transfer, except when the persons to whom the offshore derivative
instruments are to be transferred to are pre – approved by the FPI.

Procedure for Applications by AIFs, FVCIs, VCFs and FDI route

The SEBI VCF Regulations and the SEBI FVCI Regulations prescribe, among other things, the investment
restrictions on VCFs and FVCIs registered with SEBI. Further, the SEBI AIF Regulations prescribe, among other
things, the investment restrictions on AIFs.

As per the SEBI VCF Regulations and SEBI FVCI Regulations, VCFs and FVCIs are not permitted to invest in
listed companies pursuant to rights issues. Accordingly, applications by VCFs or FVCIs will not be accepted in
the Issue. Further, venture capital funds registered as Category I AIFs, as defined in the SEBI AIF Regulations,
are not permitted to invest in listed companies pursuant to rights issues. Accordingly, applications by venture
capital funds registered as category I AIFs, as defined in the SEBI AIF Regulations, will not be accepted in the
Issue. Other categories of AIFs are permitted to apply in the Issue subject to compliance with the SEBI AIF
Regulations. Such AIFs having bank accounts with SCSBs that are providing ASBA in cities / centres where such
AIFs are located are mandatorily required to make use of the ASBA facility. Otherwise, applications of such AIFs
are liable for rejection.

Procedure for Applications by NRIs

Investments by NRIs are governed by the FEMA Rules. Applications will not be accepted from NRIs that are
ineligible to participate in the Issue under applicable securities laws. As per the FEMA Rules, an NRI or Overseas
Citizen of India (“OCI”) may purchase or sell capital instruments of a listed Indian company on repatriation basis,
on a recognised stock exchange in India, subject to the conditions, inter alia, that the total holding by any
individual NRI or OCI will not exceed 5% of the total paid- up equity capital on a fully diluted basis or should
not exceed 5% of the paid-up value of each series of debentures or preference shares or share warrants issued by
an Indian company and the total holdings of all NRIs and OCIs put together will not exceed 10% of the total paid-
up equity capital on a fully diluted basis or shall not exceed 10% of the paid-up value of each series of debentures
or preference shares or share warrants. The aggregate ceiling of 10% may be raised to 24%, if a special resolution
to that effect is passed by the general body of the Indian company.

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Further, in accordance with press note 3 of 2020, the FDI Policy has been amended to state that all investments
by entities incorporated in a country which shares land border with India or where beneficial owner of an
investment into India is situated in or is a citizen of any such country (“Restricted Investors”), will require prior
approval of the Government of India. It is not clear from the press note whether or not an issue of the Rights
Equity Shares to Restricted Investors will also require prior approval of the Government of India and each Investor
should seek independent legal advice about its ability to participate in the Issue. In the event such prior approval
has been obtained, the Investor shall intimate our Company and the Registrar about such approval within the Issue
Period.

Procedure for Applications by Mutual Funds

Applications made by asset management companies or custodians of Mutual Funds should clearly and specifically
state names of the concerned schemes for which such Applications are made.

In case of a Mutual Fund, a separate Application can be made in respect of each scheme of the Mutual Fund
registered with SEBI and such Applications in respect of more than one scheme of the Mutual Fund will not be
treated as multiple Applications provided that the Applications clearly indicate the scheme concerned for which
the Application has been made.

No Mutual Fund scheme shall invest more than 10% of its net asset value in equity shares or equity related
instruments of any single company provided that the limit of 10% shall not be applicable for investments in case
of index funds or sector or industry specific schemes. No Mutual Fund under all its schemes should own more
than 10% of any company’s paid-up share capital carrying voting rights.

Procedure for applications by Systemically Important NBFCs

In case of application made by Systemically Important NBFCs registered with the RBI, (i) the certificate of
registration issued by the RBI under Section 45 –IA of the RBI Act, 1934 and (ii) net worth certificate from its
statutory auditors or any independent chartered accountant based on the last audited financial statements is
required to be attached to the application.

Last date for Application

The last date for submission of the duly filled in the Application Form or a plain paper Application is Friday,
October 11, 2024, i.e., Issue Closing Date. Our Board or any committee thereof may extend the said date for such
period as it may determine from time to time, subject to the Issue Period not exceeding 30 days from the Issue
Opening Date (inclusive of the Issue Opening Date).

If the Application Form is not submitted with an SCSB, uploaded with the Stock Exchanges and the Application
Money is not blocked with the SCSB, on or before the Issue Closing Date or such date as may be extended by
our Board or any committee thereof, the invitation to offer contained in this Letter of Offer shall be deemed to
have been declined and our Board or any committee thereof shall be at liberty to dispose of the Equity Shares
hereby offered, as set out in “- Basis of Allotment” on page 203 of this Letter of Offer.

Please note that on the Issue Closing Date, Applications through ASBA process will be uploaded until 5.00 p.m.
(Indian Standard Time) or such extended time as permitted by the Stock Exchanges. Please ensure that the
Application Form and necessary details are filled in. In place of Application number, Investors can mention the
reference number of the e-mail received from Registrar informing about their Rights Entitlement or last eight
digits of the demat account. Alternatively, SCSBs may mention their internal reference number in place of
application number.

Withdrawal of Application

An Investor who has applied in the Issue may withdraw their Application at any time during Issue Period by
approaching the SCSB where application is submitted. However, no Investor, applying through ASBA facility,
may withdraw their Application post 5.00 p.m. (Indian Standard Time) on the Issue Closing Date.

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Disposal of Application and Application Money

No acknowledgment will be issued for the Application Money received by our Company. However, the
Designated Branches of the SCSBs receiving the Application Form will acknowledge its receipt by stamping and
returning the acknowledgment slip at the bottom of each Application Form.

Our Board reserves its full, unqualified and absolute right to accept or reject any Application, in whole or in part,
and in either case without assigning any reason thereto. In case an Application is rejected in full, the whole of the
Application Money will be unblocked in the respective ASBA Accounts. Wherever an Application is rejected in
part, the balance of Application Money, if any, after adjusting any money due on Rights Equity Shares Allotted,
will be refunded / unblocked in the respective bank accounts from which Application Money was received /
ASBA Accounts of the Investor within a period of four days from the Issue Closing Date. In case of failure to do
so, our Company shall pay interest at such rate and within such time as specified under applicable law.

For further instructions, please read the Application Form carefully.

I. CREDIT OF RIGHTS ENTITLEMENTS IN DEMAT ACCOUNTS OF ELIGIBLE EQUITY

SHAREHOLDERS

• Rights Entitlements

As your name appears as a beneficial owner in respect of the issued and paid-up Equity Shares held in
dematerialised form or appears in the register of members of our Company as an Eligible Equity
Shareholder in respect of our Equity Shares held in physical form, as on the Record Date, you may be
entitled to subscribe to the number of Rights Equity Shares as set out in the Rights Entitlement Letter.

Eligible Equity Shareholders can also obtain the details of their respective Rights Entitlements from the
website of the Registrar (i.e. www.purvashare.com/,) by entering their DP ID and Client ID or folio
number (for Eligible Equity Shareholders who hold Equity Shares in physical form as on Record Date)
and PAN. The link for the same shall also be available on the website of our Company (i.e.,
www.purplefinance.in/).

In this regard, our Company has made necessary arrangements with NSDL and CDSL for crediting the
Rights Entitlements to the demat accounts of the Eligible Equity Shareholders in a dematerialized form.
A separate ISIN for the Rights Entitlements has also been generated which is INE0CYK20015. The said
ISIN shall remain frozen (for debit) until the Issue Opening Date. The said ISIN shall be suspended for
transfer by the Depositories post the Issue Closing Date.

Additionally, our Company will submit the details of the total Rights Entitlements credited to the demat
accounts of the Eligible Equity Shareholders and the demat suspense escrow account to the Stock
Exchanges after completing the corporate action. The details of the Rights Entitlements with respect to
each Eligible Equity Shareholders can be accessed by such respective Eligible Equity Shareholders on
the website of the Registrar after keying in their respective details along with other security control
measures implemented thereat.

Rights Entitlements shall be credited to the respective demat accounts of Eligible Equity
Shareholders before the Issue Opening Date only in dematerialised form. Further, if no
Application is made by the Eligible Equity Shareholders of Rights Entitlements on or before Issue
Closing Date, such Rights Entitlements shall lapse and shall be extinguished after the Issue Closing
Date. No Rights Equity Shares for such lapsed Rights Entitlements will be credited, even if such
Rights Entitlements were purchased from market and purchaser will lose the premium paid to
acquire the Rights Entitlements. Persons who are credited the Rights Entitlements are required
to make an Application to apply for Rights Equity Shares offered under Issue for subscribing to
the Rights Equity Shares offered under Issue.

If Eligible Equity Shareholders holding Equity Shares in physical form as on Record Date, have not
provided the details of their demat accounts to our Company or to the Registrar, they are required to
provide their demat account details to our Company or the Registrar not later than two clear Working

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 Days prior to the Issue Closing Date, to enable the credit of the Rights Entitlements by way of transfer
from the demat suspense escrow account to their respective demat accounts, at least one day before the
Issue Closing Date. Such Eligible Equity Shareholders holding shares in physical form can update the
details of their respective demat accounts on the website of the Registrar (i.e., www.purvashare.com/).
Such Eligible Equity Shareholders can make an Application only after the Rights Entitlements is credited
to their respective demat accounts.

In accordance with Regulation 77A of the SEBI ICDR Regulations read with the SEBI Rights
Issue Circulars, the credit of Rights Entitlements and Allotment of Rights Equity Shares shall be
made in dematerialized form only.

Prior to the Issue Opening Date, our Company shall credit the Rights Entitlements to (i) the demat
accounts of the Eligible Equity Shareholders holding the Equity Shares in dematerialised form; and (ii)
a demat suspense escrow account (namely, “Purple Finance Ltd. -RE Account- Operated by- Purva
Sharegistry (India) Pvt. Ltd.”) opened by our Company, for the Eligible Equity Shareholders which
would comprise Rights Entitlements relating to (a) Equity Shares held in the account of the IEPF
authority; or (b) the demat accounts of the Eligible Equity Shareholder which are frozen or the Equity
Shares which are lying in the unclaimed suspense account (including those pursuant to Regulation 39 of
the SEBI LODR Regulations) or details of which are unavailable with our Company or with the Registrar
on the Record Date; or (c) Equity Shares held by Eligible Equity Shareholders holding Equity Shares in
physical form as on Record Date where details of demat accounts are not provided by Eligible Equity
Shareholders to our Company or Registrar; or (d) credit of the Rights Entitlements
returned/reversed/failed; or (e) the ownership of the Equity Shares currently under dispute, including
any court proceedings, if any; or (f) non-institutional equity shareholders in the United States.

Eligible Equity Shareholders are requested to provide relevant details (such as copies of self-attested
PAN and client master sheet of demat account etc., details/ records confirming the legal and beneficial
ownership of their respective Equity Shares) to our Company or the Registrar not later than two clear
Working Days prior to the Issue Closing Date, i.e., by Wednesday, October 09, 2024 to enable the credit
of their Rights Entitlements by way of transfer from the demat suspense escrow account to their demat
account at least one day before the Issue Closing Date, i.e., by October 10, 2024 to enable such Eligible
Equity Shareholders to make an application in the Issue, and this communication shall serve as an
intimation to such Eligible Equity Shareholders in this regard.

Such Eligible Equity Shareholders are also requested to ensure that their demat account, details of which
have been provided to our Company or the Registrar is active to facilitate the aforementioned transfer.

II. RENUNCIATION AND TRADING OF RIGHTS ENTITLEMENT

• Renouncees

All rights and obligations of the Eligible Equity Shareholders in relation to Applications and refunds
pertaining to the Issue shall apply to the Renouncee(s) as well.

• Renunciation of Rights Entitlements

The Issue includes a right exercisable by Eligible Equity Shareholders to renounce the Rights
Entitlements credited to their respective demat account either in full or in part.

The renunciation from non-resident Eligible Equity Shareholder(s) to resident Indian(s) and vice versa
shall be subject to provisions of FEMA Rules and other circular, directions, or guidelines issued by RBI
or the Ministry of Finance from time to time. However, the facility of renunciation shall not be available
to or operate in favour of an Eligible Equity Shareholders being an erstwhile OCB unless the same is in
compliance with the FEMA Rules and other circular, directions, or guidelines issued by RBI or the
Ministry of Finance from time to time.

The renunciation of Rights Entitlements credited in your demat account can be made either by sale of
such Rights Entitlements, using the secondary market platform of the Stock Exchange or through an off

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 market transfer.

• Procedure for Renunciation of Rights Entitlements

The Eligible Equity Shareholders may renounce the Rights Entitlements, credited to their respective
demat accounts, either in full or in part (a) by using the secondary market platform of the Stock Exchange
(the “On Market Renunciation”); or (b) through an off market transfer (the “Off Market
Renunciation”), during the Renunciation Period. The Investors should have the demat Rights
Entitlements credited / lying in his/her own demat account prior to the renunciation. The trades through
On Market Renunciation and Off Market Renunciation will be settled by transferring the Rights
Entitlements through the depository mechanism.

In accordance with the SEBI Rights Issue Circulars, the resident Eligible Equity Shareholders, who hold
Equity Shares in physical form as on Record Date shall be required to provide their demat account details
to our Company or the Registrar to the Issue for credit of REs not later than two Working Days prior to
Issue Closing Date, such that credit of REs in their demat account takes place at least one day before
Issue Closing Date, thereby enabling them to renounce their Rights Entitlements through Off Market
Renunciation.

Investors may be subject to adverse foreign, state or local tax or legal consequences as a result of trading
in the Rights Entitlements. Investors who intend to trade in the Rights Entitlements should consult their
tax advisor or stock-broker regarding any cost, applicable taxes, charges and expenses (including
brokerage) that may be levied for trading in Rights Entitlements.

Please note that the Rights Entitlements which are neither renounced nor subscribed by the Investors on
or before the Issue Closing Date shall lapse and shall be extinguished after the Issue Closing Date.

• Payment Schedule of Rights Equity Shares

₹ 40/- per Rights Equity Share (including premium of ₹ 30/- per Rights Equity Share) shall be payable
on Application.

The Lead Manager and our Company accept no responsibility to bear or pay any cost, applicable taxes,
charges and expenses (including brokerage), and such costs will be incurred solely by the Investors.

a) On Market Renunciation

The Eligible Equity Shareholders may renounce the Rights Entitlements, credited to their respective
demat accounts by trading/selling them on the secondary market platform of the Stock Exchange through
a registered stock-broker in the same manner as the existing Equity Shares of our Company. In this
regard, in terms of provisions of the SEBI ICDR Regulations and the SEBI Rights Issue Circulars, the
Rights Entitlements credited to the respective demat accounts of the Eligible Equity Shareholders shall
be admitted for trading on the Stock Exchange under ISIN: INE0CYK20015 subject to requisite
approvals. Prior to the Issue Opening Date, our Company will obtain the approval from the Stock
Exchange for trading of Rights Entitlements. No assurance can be given regarding the active or sustained
On Market Renunciation or the price at which the Rights Entitlements will trade. The details for trading
in Rights Entitlements will be as specified by the Stock Exchange from time to time.

The Rights Entitlements are tradable in dematerialized form only. The market lot for trading of Rights
Entitlements is 1 (one) Rights Entitlements.

The On Market Renunciation shall take place only during the Renunciation Period for On Market
Renunciation, i.e., from Friday, October 04, 2024, to Tuesday, October 08, 2024, (both days inclusive).
The Investors holding the Rights Entitlements who desire to sell their Rights Entitlements will have to
do so through their registered stock-brokers by quoting the ISIN: INE0CYK20015 and indicating the
details of the Rights Entitlements they intend to trade. The Investors can place order for sale of Rights
Entitlements only to the extent of Rights Entitlements available in their demat account.

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 The On Market Renunciation shall take place electronically on the secondary market platform of the
Stock Exchanges under automatic order matching mechanism and on T+1 rolling settlement basis’,
where ‘T’ refers to the date of trading. The transactions will be settled on a trade-for-trade basis. Upon
execution of the order, the stock-broker will issue a contract note in accordance with the requirements
of the Stock Exchanges and the SEBI.

b) Off Market Renunciation

The Eligible Equity Shareholders may renounce the Rights Entitlements, credited to their respective
demat accounts by way of an off-market transfer through a depository participant. The Rights
Entitlements can be transferred in dematerialised form only. Eligible Equity Shareholders are requested
to ensure that renunciation through off market transfer is completed in such a manner that the Rights
Entitlements are credited to the demat account of the Renouncees on or prior to the Issue Closing Date
to enable Renouncees to subscribe to the Rights Equity Shares in the Issue.

The Investors holding the Rights Entitlements who desire to transfer their Rights Entitlements will have
to do so through their depository participant by issuing a delivery instruction slip quoting the ISIN:
INE0CYK20015, the details of the buyer and the details of the Rights Entitlements they intend to
transfer. The buyer of the Rights Entitlements (unless already having given a standing receipt instruction)
has to issue a receipt instruction slip to their depository participant. The Investors can transfer Rights
Entitlements only to the extent of Rights Entitlements available in their demat account.

The instructions for transfer of Rights Entitlements can be issued during the working hours of the
depository participants.

The detailed rules for transfer of Rights Entitlements through off market transfer shall be as specified by
the NSDL and CDSL from time to time.

The renunciation from non-resident Eligible Equity Shareholder(s) to resident Indian(s) and vice versa
shall be subject to provisions of FEMA Rules and other circular, directions, or guidelines issued by RBI
or the Ministry of Finance from time to time. However, the facility of renunciation shall not be available
to or operate in favour of an Eligible Equity Shareholders being an erstwhile OCB unless the same is in
compliance with the FEMA Rules and other circular, directions, or guidelines issued by RBI or the
Ministry of Finance from time to time.

III. MODE OF PAYMENT

All payments against the Application Forms shall be made only through ASBA facility. The Registrar
will not accept any payments against the Application Forms, if such payments are not made through
ASBA facility.

The Investor agrees to block the entire amount payable on Application with the submission of the
Application Form, by authorizing the SCSB to block an amount, equivalent to the amount payable on
Application, in the Investor’s ASBA Account. The SCSB may reject the application at the time of
acceptance of Application Form if the ASBA Account, details of which have been provided by the
Investor in the Application Form does not have sufficient funds equivalent to the amount payable on
Application mentioned in the Application Form. Subsequent to the acceptance of the Application by the
SCSB, our Company would have a right to reject the Application on technical grounds as set forth in
this Letter of Offer.

After verifying that sufficient funds are available in the ASBA Account details of which are provided in
the Application Form, the SCSB shall block an amount equivalent to the Application Money mentioned
in the Application Form until the Transfer Date. On the Transfer Date, upon receipt of intimation from
the Registrar, of the receipt of minimum subscription and pursuant to the finalization of the Basis of
Allotment as approved by the Designated Stock Exchange, the SCSBs shall transfer such amount as per
the Registrar’s instruction from the ASBA Account into the Allotment Account(s) which shall be a
separate bank account maintained by our Company in accordance with sub-section (3) of Section 40 of
the Companies Act, 2013. The balance amount remaining after the finalisation of the Basis of Allotment

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 on the Transfer Date shall be unblocked by the SCSBs on the basis of the instructions issued in this
regard by the Registrar to the respective SCSB.

In terms of RBI Circular DBOD No. FSC BC 42/24.47.00/2003- 04 dated November 5, 2003, the stock
investment scheme has been withdrawn. Hence, payment through stock invest would not be accepted in
the Issue.

Mode of payment for Resident Investors

All payments on the Application Forms shall be made only through ASBA facility. Applicants are
requested to strictly adhere to these instructions.

Mode of payment for Non-Resident Investors

As regards the Application by non-resident Investors, payment must be made only through ASBA
facility and using permissible accounts in accordance with FEMA, FEMA Rules and requirements
prescribed by RBI and subject to the following:
1. In case where repatriation benefit is available, interest, dividend, sales proceeds derived from
the investment in Rights Equity Shares can be remitted outside India, subject to tax, as
applicable according to the Income tax Act. However, please note that conditions applicable at
the time of original investment in our Company by the Eligible Equity Shareholder including
repatriation shall not change and remain the same for subscription in the Issue or subscription
pursuant to renunciation in the Issue.
2. Subject to the above, in case Rights Equity Shares are Allotted on a non-repatriation basis, the
dividend and sale proceeds of the Rights Equity Shares cannot be remitted outside India.
3. In case of an Application Form received from non-residents, Allotment, refunds and other
distribution, if any, will be made in accordance with the guidelines and rules prescribed by RBI
as applicable at the time of making such Allotment, remittance and subject to necessary
approvals.
4. Application Forms received from non-residents/ NRIs, or persons of Indian origin residing
abroad for Allotment of Rights Equity Shares shall, amongst other things, be subject to
conditions, as may be imposed from time to time by RBI under FEMA, in respect of matters
including Refund of Application Money and Allotment.
5. In the case of NRIs who remit their Application Money from funds held in FCNR/NRE
Accounts, refunds and other disbursements, if any shall be credited to such account.
6. Non-resident Renouncees who are not Eligible Equity Shareholders must submit regulatory
approval for applying for Additional Rights Equity Shares.

IV. BASIS FOR THE ISSUE AND TERMS OF THE ISSUE

The Rights Equity Shares are being offered for subscription to the Eligible Equity Shareholders whose
names appear as beneficial owners as per the list to be furnished by the Depositories in respect of our
Equity Shares held in dematerialised form and on the register of members of our Company in respect of
our Equity Shares held in physical form at the close of business hours on the Record Date.

For principal terms of Issue such as face value, Issue Price, Rights Entitlement ratio, see “The Issue”
beginning on page 37 of this Letter of Offer.

Fractional Entitlements

The Rights Equity Shares are being offered on a rights basis to Eligible Equity Shareholders in the ratio
of 1 (One) Rights Equity Share for every 3 (Three) Equity Shares held on the Record Date. For Equity
Shares being offered on a rights basis under the Issue, if the shareholding of any of the Eligible Equity
Shareholders is less than 3 Equity Shares or not in the multiple of 3, the fractional entitlement of such
Eligible Equity Shareholders shall be ignored in the computation of the Rights Entitlement. However,
the Eligible Equity Shareholders whose fractional entitlements are being ignored, will be given
preferential consideration for the allotment of one additional Equity Share each if they apply for
additional Equity Shares over and above their rights entitlement, if any.

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For example, if an Eligible Equity Shareholder holds 3 (Three) Equity Shares, such Equity Shareholder
will be entitled to 1 (one) Equity Share.

Further, the Eligible Equity Shareholders holding less than 3 (Three) Equity Shares shall have ‘zero’
entitlement in the Issue. Such Eligible Equity Shareholders are entitled to apply for additional Equity
Shares and will be given preference in the allotment of one additional Equity Share if such Eligible
Equity Shareholders apply for the additional Equity Shares. However, they cannot renounce the same in
favour of third parties and the application forms shall be non-negotiable.

Ranking

The Rights Equity Shares to be issued and Allotted pursuant to the Issue shall be subject to the provisions
of this Letter of Offer, the Abridged Letter of Offer, the Rights Entitlement Letter, the Application Form,
and the Memorandum of Association and the Articles of Association, the provisions of the Companies
Act, 2013, FEMA, the SEBI ICDR Regulations, the SEBI LODR Regulations, and the guidelines,
notifications and regulations issued by SEBI, the Government of India and other statutory and regulatory
authorities from time to time, the terms of the Listing Agreements entered into by our Company with the
Stock Exchanges and the terms and conditions as stipulated in the Allotment advice. The Rights Equity
Shares to be issued and Allotted under the Issue shall rank pari passu with the existing Equity Shares,
in all respects including dividends.

Listing and trading of the Rights Equity Shares to be issued pursuant to the Issue

Subject to receipt of the listing and trading approvals, the Rights Equity Shares proposed to be issued on
a rights basis shall be listed and admitted for trading on CSE and BSE. Unless otherwise permitted by
the SEBI ICDR Regulations, the Rights Equity Shares Allotted pursuant to the Issue will be listed as
soon as practicable and all steps for completion of necessary formalities for listing and commencement
of trading in the Rights Equity Shares will be taken within such period prescribed under the SEBI ICDR
Regulations. Our Company has received in-principle approval from the BSE and CSE through their
letters bearing reference number dated September 13, 2024 and dated September 17, 2024 respectively.
Our Company will apply to the Stock Exchanges for final approval for the listing and trading of the
Rights Equity Shares subsequent to its Allotment.

No assurance can be given regarding the active or sustained trading in the Rights Equity Shares or the
price at which the Rights Equity Shares offered under the Issue will trade after the listing thereof. The
existing Equity Shares are listed and traded on BSE Limited (Scrip Code: 544191) and CSE (Scrip Code:
26505) under the ISIN: INE0CYK01015. The Rights Equity Shares shall be credited to a temporary
ISIN which will be frozen until the receipt of the final listing/ trading approvals from the Stock
Exchanges.

Upon receipt of such listing and trading approvals, the Rights Equity Shares shall be debited from such
temporary ISIN and credited to the new ISIN for the Rights Equity Shares and thereafter be available
for trading and the temporary ISIN shall be permanently deactivated in the depository system of CDSL
and NSDL.

The listing and trading of the Rights Equity Shares issued pursuant to the Issue shall be based on the
current regulatory framework then applicable. Accordingly, any change in the regulatory regime would
affect the listing and trading schedule.

In case our Company fails to obtain listing or trading permission from the Stock Exchanges, our
Company shall refund through verifiable means/unblock the respective ASBA Accounts, the entire
monies received/blocked within four days of receipt of intimation from the Stock Exchanges, rejecting
the application for listing of the Rights Equity Shares, and if any such money is not refunded/ unblocked
within four days after our Company becomes liable to repay it, our Company and every director of our
Company who is an officer-in-default shall, on and from the expiry of the fourth day, be jointly and
severally liable to repay that money with interest at rates prescribed under applicable law.

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• Subscription to the Issue by our Promoter and members of the Promoter Group

For details of the intent and extent of subscription by our Promoter, see “Capital Structure – Intention
and extent of participation by our Promoters and Promoter Group in the Issue” on page 45.

V. GENERAL TERMS OF THE ISSUE

• Market Lot

The Equity Shares of our Company shall be tradable only in dematerialized form. The market lot for
Equity Shares in dematerialised mode is one Equity Share.

• Joint Holders

Where two or more persons are registered as the holders of any Equity Shares, they shall be deemed to
hold the same as the joint holders with the benefit of survivorship subject to the provisions contained in
our Articles of Association. In case of Equity Shares held by joint holders, the Application submitted in
physical mode to the Designated Branch of the SCSBs would be required to be signed by all the joint
holders (in the same order as appearing in the records of the Depository) to be considered as valid for
allotment of Equity Shares offered in the Issue.

• Nomination

Nomination facility is available in respect of Equity Shares in accordance with the provisions of the
Section 72 of the Companies Act, 2013 read with Rule 19 of the Companies (Share Capital and
Debenture) Rules, 2014. Since the Allotment is in dematerialised form, there is no need to make a
separate nomination for the Equity Shares to be allotted in the Issue. Nominations registered with the
respective DPs of the Investors would prevail. Any Investor holding Equity Shares in dematerialised
form and desirous of changing the existing nomination is requested to inform its Depository Participant.

• Arrangements for Disposal of Odd Lots

The Equity Shares shall be traded in dematerialised form only and, therefore, the marketable lot shall be
one Equity Share and hence, no arrangements for disposal of odd lots are required.

• Restrictions on transfer and transmission of shares and on their consolidation/splitting

There are no restrictions on transfer and transmission and on their consolidation/splitting of shares issued
pursuant to this Issue. However, the Investors should note that pursuant to provisions of the SEBI LODR
Regulations, with effect from April 1, 2019, except in case of transmission or transposition of securities,
the request for transfer of securities shall not affected unless the securities are held in the dematerialized
form with a depository.
• Notices

In accordance with the SEBI ICDR Regulations and the SEBI Rights Issue Circulars, and MCA General
Circular No. 21/2020 dated May 11, 2020, our Company will send through email and speed post, the
Abridged Letter of Offer, the Application Form, the Rights Entitlement Letter and other Issue material
will be sent/ dispatched only to the Eligible Equity Shareholders who have provided Indian address. In
case such Eligible Equity Shareholders have provided their valid e-mail address, the Abridged Letter of
Offer, the Application Form, the Rights Entitlement Letter and other Issue material will be sent only to
their valid e-mail address and in case such Eligible Equity Shareholders have not provided their e-mail
address, then, the Abridged Letter of Offer, the Application Form, the Rights Entitlement Letter and
other Issue material will be physically dispatched, on a reasonable effort basis, to the Indian addresses
provided by them.

All notices to the Eligible Equity Shareholders required to be given by our Company shall be published
in one English language national daily newspaper with wide circulation, one Hindi language national

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 daily newspaper with wide circulation and one regional Tamil daily newspaper with wide circulation
(Tamil also being the regional language in the place where our Registered and Corporate Office is
located).

This Letter of Offer, the Abridged Letter of Offer and the Application Form shall also be submitted with
the Stock Exchanges for making the same available on its website.

• Offer to Non-Resident Eligible Equity Shareholders/Investors

As per Rule 7 of the FEMA Rules, RBI has given general permission to a person resident outside India
and having investment in an Indian company to make investment in rights equity shares issued by such
company subject to certain conditions. Further, as per the Master Direction on Foreign Investment in
India dated January 4, 2018 issued by RBI, non-residents may, amongst other things, subject to the
conditions set out therein (i) subscribe for additional shares over and above their rights entitlements; (ii)
renounce the shares offered to them either in full or part thereof in favour of a person named by them;
or (iii) apply for the shares renounced in their favour. Applications received from NRIs and non-residents
for allotment of Rights Equity Shares shall be, amongst other things, subject to the conditions imposed
from time to time by RBI under FEMA in the matter of Application, refund of Application Money,
Allotment of Rights Equity Shares and issue of Rights Entitlement Letters/ letters of
Allotment/Allotment advice.

If a non-resident or NRI Investor has specific approval from RBI or any other governmental authority,
in connection with his shareholding in our Company, such person should enclose a copy of such approval
with the Application details and send it to the Registrar at www.purvashare.com/. It will be the sole
responsibility of the investors to ensure that the necessary approval from the RBI or the governmental
authority is valid in order to make any investment in the Issue and the Lead Manager and our Company
will not be responsible for any such allotments made by relying on such approvals.

The Abridged Letter of Offer, the Rights Entitlement Letter and Application Form shall be sent only to
the Indian addresses of the non-resident Eligible Equity Shareholders on a reasonable efforts basis, who
have provided an Indian address to our Company and located in jurisdictions where the offer and sale of
the Rights Equity Shares may be permitted under laws of such jurisdictions. Eligible Equity Shareholders
can access this Letter of Offer, the Abridged Letter of Offer and the Application Form (provided that the
Eligible Equity Shareholder is eligible to subscribe for the Rights Equity Shares under applicable
securities laws) from the websites of the Registrar, our Company, the Lead Manager and the Stock
Exchanges.

Further, Application Forms will be made available at Registered and Corporate Office of our Company
for the non-resident Indian Applicants. Our Board may at its absolute discretion, agree to such terms and
conditions as may be stipulated by RBI while approving the Allotment. The Rights Equity Shares
purchased by non-residents shall be subject to the same conditions including restrictions in regard to the
repatriation as are applicable to the original Equity Shares against which Rights Equity Shares are issued
on rights basis. In case of change of status of holders, i.e., from resident to non-resident, a new demat
account must be opened.

Any Application from a demat account which does not reflect the accurate status of the Applicant is
liable to be rejected at the sole discretion of our Company and the Lead Manager.

ALLOTMENT OF THE RIGHTS EQUITY SHARES IN DEMATERIALIZED FORM PLEASE

NOTE THAT THE RIGHTS EQUITY SHARES APPLIED FOR IN THE ISSUE CAN BE
ALLOTTED ONLY IN DEMATERIALIZED FORM AND TO THE SAME DEPOSITORY
ACCOUNT IN WHICH OUR EQUITY SHARES ARE HELD BY SUCH INVESTOR ON THE
RECORD DATE. FOR DETAILS, SEE “- ALLOTMENT ADVICE OR REFUND/
UNBLOCKING OF ASBA ACCOUNTS” ON PAGE 204 OF THIS LETTER OF OFFER.

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VI. ISSUE SCHEDULE

Issue Opening Date Friday, October 04, 2024

Last date for On Market Renunciation# Tuesday, October 08, 2024

Issue Closing Date Friday, October 11, 2024

Finalising the basis of allotment with the Designated Stock Thursday, October 17, 2024
Exchange
Date of Allotment (on or about) Friday, October 18, 2024
Initiation of refunds Friday, October 18, 2024
Date of credit (on or about) Tuesday, October 22, 2024
Date of listing (on or about) Wednesday, October 23, 2024
*Our Board may, however, decide to extend the Issue Period as it may determine from time to time but not exceeding 30 days
from the Issue Opening Date (inclusive of the Issue Opening Date).
**Investors are advised to ensure that the Application Forms are submitted on or before the Issue Closing Date. Our Company,
the Lead Manager and/or the Registrar to the Issue will not be liable for any loss on account of non-submission of Application
Forms or on before the Issue Closing Date.
#Eligible Equity Shareholders are requested to ensure that renunciation through off-market transfer is completed in such a manner
that the Rights Entitlements are credited to the demat account of the Renouncee(s) on or prior to the Issue Closing Date.

Please note that if Eligible Equity Shareholders holding Equity Shares in physical form as on Record
Date, have not provided the details of their demat accounts to our Company or to the Registrar, they are
required to provide their demat account details to our Company or the Registrar not later than two clear
Working Days prior to the Issue Closing Date, i.e., Wednesday, October 09, 2024 to enable the credit of
the Rights Entitlements by way of transfer from the demat suspense account to their respective demat
accounts, at least one day before the Issue Closing Date, i.e., Thursday, October 10, 2024.

VII. BASIS OF ALLOTMENT

Subject to the provisions contained in this Letter of Offer, the Abridged Letter of Offer, the Rights
Entitlement Letter, the Application Form, the Articles of Association and the approval of the Designated
Stock Exchange, our Board will proceed to allot the Rights Equity Shares in the following order of
priority:

(a) Full Allotment to those Eligible Equity Shareholders who have applied for their Rights
Entitlements of Rights Equity Shares either in full or in part and also to the Renouncee(s) who
has or have applied for Rights Equity Shares renounced in their favour, in full or in part, as
adjusted for fraction entitlement.

(b) Eligible Equity Shareholders whose fractional entitlements are being ignored and Eligible
Equity Shareholders with zero entitlement, would be given preference in allotment of one
Additional Rights Equity Share each if they apply for Additional Rights Equity Shares.
Allotment under this head shall be considered if there are any unsubscribed Rights Equity
Shares after allotment under (a) above. If number of Rights Equity Shares required for
Allotment under this head are more than the number of Rights Equity Shares available after
Allotment under (a) above, the Allotment would be made on a fair and equitable basis in
consultation with the Designated Stock Exchange and will not be a preferential allotment.

(c) Allotment to the Eligible Equity Shareholders who having applied for all the Rights Equity
Shares offered to them as part of the Issue, have also applied for Additional Rights Equity
Shares. The Allotment of such Additional Rights Equity Shares will be made as far as possible
on an equitable basis having due regard to the number of Equity Shares held by them on the
Record Date, provided there are any unsubscribed Rights Equity Shares after making full
Allotment in (a) and (b) above. The Allotment of such Rights Equity Shares will be at the sole
discretion of our Board in consultation with the Designated Stock Exchange, as a part of the
Issue and will not be a preferential allotment.

(d) Allotment to Renouncees who having applied for all the Rights Equity Shares renounced in

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 their favour, have applied for Additional Rights Equity Shares provided there is surplus
available after making full Allotment under (a), (b) and (c) above. The Allotment of such Rights
Equity Shares will be made on a proportionate basis in consultation with the Designated Stock
Exchange, as a part of the Issue and will not be a preferential allotment.

(e) Allotment to any other person, subject to applicable laws, that our Board may deem fit, provided
there is surplus available after making Allotment under (a), (b), (c) and (d) above, and the
decision of our Board in this regard shall be final and binding.

After taking into account Allotment to be made under (a) to (d) above, if there is any unsubscribed
portion, the same shall be deemed to be ‘unsubscribed’.

Upon approval of the Basis of Allotment by the Designated Stock Exchange, the Registrar shall send to
the Controlling Branches, a list of the Investors who have been allocated Rights Equity Shares in the
Issue, along with:

1. The amount to be transferred from the ASBA Account to the separate bank account opened by
our Company for the Issue, for each successful Application;

2. The date by which the funds referred to above, shall be transferred to the aforesaid bank
account; and

3. The details of rejected ASBA applications, if any, to enable the SCSBs to unblock the respective
ASBA Accounts.

Further, the list of Applicants eligible for refund with corresponding amount will also be shared with
Banker to the Issue to refund such Applicants.

VIII. ALLOTMENT ADVICE OR REFUND/ UNBLOCKING OF ASBA ACCOUNTS

Our Company will send/ dispatch Allotment advice, refund intimations or demat credit of securities
and/or letters of regret, only to the Eligible Equity Shareholders who have provided Indian address. In
case such Eligible Equity Shareholders have provided their valid e-mail address, Allotment advice,
refund intimations or demat credit of securities and/or letters of regret will be sent only to their valid e-
mail address and in case such Eligible Equity Shareholders have not provided their e-mail address, then
the Allotment advice, refund intimations or demat credit of securities and/or letters of regret will be
dispatched, on a reasonable effort basis, to the Indian addresses provided by them; along with crediting
the Allotted Equity Shares to the respective beneficiary accounts (only in dematerialised mode) or in a
demat suspense account (in respect of Eligible Equity Shareholders holding Equity Shares in physical
form on the Allotment Date) or issue instructions for unblocking the funds in the respective ASBA
Accounts, if any, within a period of 1 day from the finalisation of Basis of allotment T+1, T being the
date of approval of basis of allotment. In case of failure to do so, our Company and our Directors who
are “officers in default” shall pay interest at 15% p.a. and such other rate as specified under applicable
law from the expiry of such 1 day’ period.

The Rights Entitlements will be credited in the dematerialized form using electronic credit under the
depository system and the Allotment advice shall be sent, through a mail, to the Indian mail address
provided to our Company or at the address recorded with the Depository.

In the case of non-resident Investors who remit their Application Money from funds held in the NRE or
the FCNR Accounts, unblocking refunds and/or payment of interest or dividend and other disbursements,
if any, shall be credited to such accounts.

Where an Applicant has applied for Additional Rights Equity Shares in the Issue and is Allotted a lesser
number of Rights Equity Shares than applied for, the excess Application Money paid/blocked shall be
refunded/unblocked. The unblocking of ASBA funds / refund of monies shall be completed be within
such period as prescribed under the SEBI ICDR Regulations. In the event that there is a delay in making
refunds beyond such period as prescribed under applicable law, our Company shall pay the requisite

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 interest at such rate as prescribed under applicable law.

IX. PAYMENT OF REFUND

• Mode of making refunds

In case of Applicants not eligible to make an application through ASBA process, the payment of refund,
if any, including in the event of oversubscription or failure to list or otherwise would be done through
unblocking amounts blocked using ASBA facility.

• Refund payment to non-residents

The Application Money will be unblocked in the ASBA Account of the non-resident Applicants, details
of which were provided in the Application Form.

X. ALLOTMENT ADVICE OR DEMAT CREDIT OF SECURITIES

The demat credit of securities to the respective beneficiary accounts will be credited within 15 days from
the Issue Closing Date or such other timeline in accordance with applicable laws.

• Receipt of the Rights Equity Shares in Dematerialized Form

PLEASE NOTE THAT THE RIGHTS EQUITY SHARES APPLIED FOR UNDER THE ISSUE
CAN BE ALLOTTED ONLY IN DEMATERIALIZED FORM AND TO (A) THE SAME
DEPOSITORY ACCOUNT/ CORRESPONDING PAN IN WHICH THE EQUITY SHARES
ARE HELD BY SUCH INVESTOR ON THE RECORD DATE, OR (B) THE DEPOSITORY
ACCOUNT, DETAILS OF WHICH HAVE BEEN PROVIDED TO OUR COMPANY OR THE
REGISTRAR AT LEAST TWO CLEAR WORKING DAYS PRIOR TO THE ISSUE CLOSING
DATE BY THE ELIGIBLE EQUITY SHAREHOLDER HOLDING EQUITY SHARES IN
PHYSICAL FORM AS ON THE RECORD DATE, OR (C) DEMAT SUSPENSE ACCOUNT
PENDING RECEIPT OF DEMAT ACCOUNT DETAILS FOR RESIDENT ELIGIBLE EQUITY
SHAREHOLDERS HOLDING EQUITY SHARES FORM/ WHERE THE CREDIT OF THE
RIGHTS ENTITLEMENTS RETURNED/REVERSED/FAILED.

Investors shall be Allotted the Rights Equity Shares in dematerialized (electronic) form. Our Company
has signed two agreements with the respective Depositories and the Registrar to the Issue, which enables
the Investors to hold and trade in the securities issued by our Company in a dematerialized form, instead
of holding the Equity Shares in the form of physical certificates: tripartite agreements dated March 13,
2020, and July 13, 2022 amongst our Company, NSDL and CDSL, respectively, and the Registrar to the
Issue.

INVESTORS MAY PLEASE NOTE THAT THE RIGHTS EQUITY SHARES CAN BE
TRADED ON THE STOCK EXCHANGES ONLY IN DEMATERIALIZED FORM.

The procedure for availing the facility for Allotment of Rights Equity Shares in the Issue in the
dematerialised form is as under:

1. Open a beneficiary account with any depository participant (care should be taken that the
beneficiary account should carry the name of the holder in the same manner as is registered in
the records of our Company. In the case of joint holding, the beneficiary account should be
opened carrying the names of the holders in the same order as registered in the records of our
Company). In case of Investors having various folios in our Company with different joint
holders, the Investors will have to open separate accounts for such holdings. Those Investors
who have already opened such beneficiary account(s) need not adhere to this step.
2. It should be ensured that the depository account is in the name(s) of the Investors and the names
are in the same order as in the records of our Company or the Depositories.
3. The responsibility for correctness of information filled in the Application Form vis-a-vis such
information with the Investor’s depository participant, would rest with the Investor. Investors

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 should ensure that the names of the Investors and the order in which they appear in Application
Form should be the same as registered with the Investor’s depository participant.
4. If incomplete or incorrect beneficiary account details are given in the Application Form, the
Investor will not get any Rights Equity Shares and the Application Form will be rejected.
5. The Rights Equity Shares will be allotted to Applicants only in dematerialized form and would
be directly credited to the beneficiary account as given in the Application Form after
verification or demat suspense account (pending receipt of demat account details for resident
Eligible Equity Shareholders holding Equity Shares in physical form/ with Investor Education
and Protection Fund (IEPF) authority/ in suspense, etc.). Allotment advice, refund order (if any)
would be sent through physical dispatch, by the Registrar but the Applicant’s depository
participant will provide to him the confirmation of the credit of such Rights Equity Shares to
the Applicant’s depository account.
6. Non-transferable Allotment advice/ refund intimation will be directly sent to the Investors by
the Registrar, through physical dispatch.
7. Renouncees will also have to provide the necessary details about their beneficiary account for
Allotment of Rights Equity Shares in the Issue. In case these details are incomplete or incorrect,
the Application is liable to be rejected.
8. Dividend or other benefits with respect to the Equity Shares held in dematerialized form would
be paid to those Equity Shareholders whose names appear in the list of beneficial owners given
by the Depository Participant to our Company as on the date of the book closure.
9. Resident Eligible Equity Shareholders, who hold Equity Shares in physical form and who have
not furnished the details of their demat account to the Registrar or our Company at least two
Working Days prior to the Issue Closing Date, shall not be able to apply in this Issue

Impersonation

As a matter of abundant caution, attention of the Investors is specifically drawn to the provisions of Section 38
of the Companies Act, 2013 which is reproduced below:

“Any person who:

(i) makes or abets making of an application in a fictitious name to a company for acquiring, or subscribing
for, its securities; or
(ii) makes or abets making of multiple applications to a company in different names or in different
combinations of his name or surname for acquiring or subscribing for its securities; or
(iii) otherwise induces directly or indirectly a company to allot, or register any transfer of, securities to him,
or to any other person in a fictitious name, shall be liable for action under Section 447.”

The liability prescribed under Section 447 of the Companies Act, 2013 for fraud involving an amount of at least
₹ 10 lakhs or 1% of the turnover of the Company, whichever is lower, includes imprisonment for a term which
shall not be less than six months extending up to ten years (provided that where the fraud involves public interest,
such term shall not be less than three years) and fine of an amount not less than the amount involved in the fraud,
extending up to three times of such amount. Where such fraud (i) involves an amount which is less than ₹ 10
lakhs or 1% of the turnover of the Company, whichever is lower, and (ii) does not involve public interest, then
such fraud is punishable with imprisonment for a term extending up to five years or fine of an amount extending
up to ₹ 50 lakhs or with both.

Utilization of Issue Proceeds

Our Board of Directors declares that:

(a) All monies received out of the Issue shall be transferred to a separate bank account;
(b) Details of all monies utilized out of the Issue shall be disclosed, and shall continue to be disclosed until
the time any part of the Issue Proceeds remains unutilized, under an appropriate separate head in the
balance sheet of our Company indicating the purpose for which such monies have been utilized;
(c) Details of all unutilized monies out of the Issue, if any, shall be disclosed under an appropriate separate
head in the balance sheet of our Company indicating the form in which such unutilized monies have
been invested; and
(d) Our Company may utilize the funds collected in the Issue only after final listing and trading approvals
for the Rights Equity Shares Allotted in the Issue is received.

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Undertakings by our Company

Our Company undertakes the following:

(i) The complaints received in respect of the Issue shall be attended to by our Company expeditiously and
satisfactorily.
(ii) All steps for completion of the necessary formalities for listing and commencement of trading at the
Stock Exchanges where the Rights Equity Shares are to be listed will be taken within the time prescribed
by the SEBI.
(iii) The funds required for making refunds to unsuccessful Applicants as per the mode(s) disclosed shall be
made available to the Registrar by our Company.
(iv) Where refunds are made through electronic transfer of funds, a suitable communication shall be sent to
the Investor within 15 days of the Issue Closing Date, giving details of the banks where refunds shall be
credited along with amount and expected date of electronic credit of refund.
(v) Other than any Equity Shares that may be issued pursuant to exercise options under the ESOP 2016 and
ESOP 2018, no further issue of securities affecting our Company’s Equity Share capital shall be made
until the Rights Equity Shares are listed or until the Application Money is refunded on account of non-
listing, under subscription etc.
(vi) In case of unblocking of the application amount for unsuccessful Applicants or part of the application
amount in case of proportionate Allotment, a suitable communication shall be sent to the Applicants.
(vii) Adequate arrangements shall be made to collect all ASBA Applications and to consider them similar to
non- ASBA Applications while finalizing the Basis of Allotment.
(viii) At any given time, there shall be only one denomination for the Rights Equity Shares of our Company.
(ix) Our Company shall comply with all disclosure and accounting norms specified by the SEBI from time
to time.
(x) Our Company accepts full responsibility for the accuracy of information given in this Letter of Offer
and confirms that to the best of its knowledge and belief, there are no other facts the omission of which
makes any statement made in this Letter of Offer misleading and further confirms that it has made all
reasonable enquiries to ascertain such facts.

Minimum Subscription

Our Promoter and Promoter Group may or may not fully subscribe to their respective entitlements, arising out of
the proposed Rights Issue and may renounce a part of their rights entitlement in the favour of third parties whom
our Promoters and Promoter Group may identify in due course. Therefore, the criteria required for exemption
from minimum subscription of 90% of the Issue set out in the second paragraph to the proviso to Regulation 86(1)
of the SEBI ICDR Regulations is not met by our Company. Our Company must, therefore, ensure a minimum
subscription of 90% of the Issue in this proposed Rights Issue. In the event of non-receipt of minimum
subscription, all application monies received shall be refunded to the Applicants / ASBA account unblocked
forthwith, but not later than four days from the closure of the Rights Issue, in compliance with Pursuant to
regulation 86(2) of the SEBI ICDR Regulations.

Filing

SEBI vide the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) (Fourth
Amendment) Regulations, 2020 has amended Regulation 3(b) of the SEBI ICDR Regulations as per which the
threshold for filing of the draft letter of offer with SEBI for rights issues has been increased. The threshold of the
rights issue size under Regulation 3 (b) of the SEBI ICDR Regulations has been increased from Rupees one
thousand lakhs to Rupees five thousand lakhs. Since the size of this Issue falls below this threshold, the Draft
Letter of Offer has been filed with BSE Limited and Calcutta Stock Exchange Limited and not with SEBI.
However, the Letter of Offer is submitted with SEBI for information and dissemination and also filed with the
Stock Exchanges.

Withdrawal of the Issue

Subject to provisions of the SEBI ICDR Regulations, the Companies Act and other applicable laws, our Company
in consultation with the Lead Manager, reserves the right not to proceed with the Issue at any time before the
Issue Opening Date without assigning any reason thereof.

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If our Company withdraws the Issue any time after the Issue Opening Date, a public notice within two (2) Working
Days of the Issue Closing Date or such other time as may be prescribed by SEBI, providing reasons for not
proceeding with the Issue shall be issued by our Company. The notice of withdrawal will be issued in the same
newspapers where the pre-Issue advertisement has appeared and the Stock Exchanges will also be informed
promptly.

The Lead Manager, through the Registrar to the Issue, will instruct the SCSBs to unblock the ASBA Accounts
within one (1) working Day from the day of receipt of such instruction. Our Company shall also inform the same
to the Stock Exchanges.

If our Company withdraws the Issue at any stage including after the Issue Closing Date and subsequently decides
to proceed with an Issue of the Equity Shares, our Company will file a fresh offer document with the Stock
Exchanges where the Equity Shares may be proposed to be listed.

Important

Please read this Letter of Offer carefully before taking any action. The instructions contained in the Application
Form, Abridged Letter of Offer and the Rights Entitlement Letter are an integral part of the conditions of the
Letter of Offer and must be carefully followed; otherwise the Application is liable to be rejected. It is to be
specifically noted that this Issue of Rights Equity Shares is subject to the risk factors mentioned in “Risk Factors”
on page 22 of this Letter of Offer.

All enquiries in connection with this Letter of Offer or Application Form and the Rights Entitlement Letter must
be addressed (quoting the Registered Folio Number or the DP and Client ID number, the Application Form
number and the name of the first Eligible Equity Shareholder as mentioned on the Application Form and super
scribed “Purple Finance Limited – Rights Issue” on the envelope to the Registrar at the following address:

Purva Sharegistry (India) Private Limited

9 Shiv Shakti Industrial Estate,
J R Boricha Marg,
Lower Parel (E),
Mumbai, Maharashtra, 400011
Telephone: 022-4961 4132 / 4970 0138
Email: support@purvashare.com
Website: www.purvashare.com/
Investor grievance e-mail: newissue@purvashare.com
Contact Person: Deepali Dhuri
SEBI Registration No.: INR000001112

The Issue will remain open for a minimum period of 7 (seven) days. However, our Board will have the right to
extend the Issue Period as it may determine from time to time but not exceeding 30 (thirty) days from the Issue
Opening Date (inclusive of the Issue Closing Date).

The Investors can visit following links for the below-mentioned purposes:
a) Frequently asked questions are available on the website of the Registrar (www.purvashare.com/);
b) Updation of email address/ mobile number in the records maintained by the Registrar or our Company
www.purvashare.com/;
c) Updation of Indian address can be sent to Registrar at email ID newissue@purvashare.com;
d) Updation of demat account details by Eligible Equity Shareholders holding shares in physical form:
www.purvashare.com/; and
e) Submission of self-attested PAN, client master sheet and demat account details by non- resident
Eligible Equity Shareholders at newissue@purvashare.com

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 RESTRICTIONS ON FOREIGN OWNERSHIP AND INDIAN SECURITIES

Foreign investment in Indian securities is regulated through the Industrial Policy, 1991, of the Government of
India and FEMA. While the Industrial Policy, 1991, of the Government of India, prescribes the limits and the
conditions subject to which foreign investment can be made in different sectors of the Indian economy, FEMA
regulates the precise manner in which such investment may be made. The Union Cabinet, as provided in the
Cabinet Press Release dated May 24, 2017, has given its approval for phasing out the Foreign Investment
Promotion Board ("FIPB"). Under the Industrial Policy, 1991, unless specifically restricted, foreign investment
is freely permitted in all sectors of the Indian economy up to any extent and without any prior approvals, but the
foreign investor is required to follow certain prescribed procedures for making such investment. Accordingly, the
process for foreign direct investment ("FDI") and approval from the Government of India will now be handled by
the concerned ministries or departments, in consultation with the Department for Promotion of Industry and
Internal Trade, Ministry of Commerce and Industry, Government of India (formerly known as the Department of
Industrial Policy and Promotion) ("DPIIT"), Ministry of Finance, Department of Economic Affairs, FIPB section,
through a memorandum dated June 5, 2017, has notified the specific ministries handling relevant sectors.

The Government has, from time to time, made policy pronouncements on FDI through press notes and press
releases. The DPIIT issued the Consolidated FDI Policy Circular of 2020 "FDI Policy") by way of circular bearing
number DPIIT file number 5(2)/2020-FDI Policy dated October 15, 2020, which with effect from October 15,
2020, consolidates and supersedes all previous press notes, press releases and clarifications on FDI issued by the
DPIIT that were in force and effect as on October 15, 2020. The Government of India has from time to time made
policy pronouncements on FDI through press notes and press releases which are notified by RBI as amendments
to FEMA. In case of any conflict between FEMA and such policy pronouncements, FEMA prevails. The transfer
of shares between an Indian resident and a non-resident does not require the prior approval of the RBI, provided
that (i) the activities of the investee company falls under the automatic route as provided in the FDI Policy and
FEMA and transfer does not attract the provisions of the SEBI Takeover Regulations; (ii) the non-resident
shareholding is within the sectoral limits under the FDI Policy; and (iii) the pricing is in accordance with the
guidelines prescribed by SEBI and RBI.

As per the extant policy of the Government of India, erstwhile OCBs cannot participate in this Issue. OCBs or
Overseas Corporate Bodies have been de-recognised as a class of investor entity in India with effect from
September 16, 2003.

Overseas Corporate Body means a company, partnership firm, society and other corporate body owned directly
or indirectly to the extent of at least sixty per cent by Non- Resident Indians and includes overseas trust in which
not less than sixty percent beneficial interest is held by Non-resident Indians directly or indirectly but irrevocably,
which was in existence as on September 16, 2003 and was eligible to undertake transactions pursuant to the
general permission granted under FEMA. Any investment made in India by such entities will be treated as
investments by incorporated non-resident entities, i.e. a foreign company.

The Rights Equity Shares purchased by non- residents shall be subject to the same conditions including restrictions
in regard to the repatriation as are applicable to the original Equity Shares against which Rights Equity Shares are
issued on rights basis. The above information is given for the benefit of the Investors. Our Company is not liable
for any amendments or modification or changes in applicable laws or regulations, which may occur after the date
of this Letter of Offer. Investors are advised to make their independent investigations and ensure that the number
of Rights Equity Shares applied for do not exceed the applicable limits under laws or regulations.

RESTRICTIONS ON PURCHASES AND RESALES

General Eligibility and Restrictions

No action has been taken or will be taken to permit a public offering of the Rights Entitlements or the Issue Shares
in any jurisdiction, or the possession, circulation, or distribution of this Letter of Offer, its accompanying
documents or any other material relating to our Company, the Rights Entitlements or the Equity Shares in any
jurisdiction where action for such purpose is required, except that this Letter of Offer will be filed with the Stock
Exchanges.

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The Rights Entitlements and the Issue Shares have not been and will not be registered under the U.S. Securities
Act and may not be offered or sold within the United States.

The Rights Entitlements or the Equity Shares may not be offered or sold, directly or indirectly, and none of this
Letter of Offer, its accompanying documents or any offering materials or advertisements in connection with the
Rights Entitlements or the Equity Shares may be distributed or published in or from any country or jurisdiction
except in accordance with the legal requirements applicable in such jurisdiction.

Investors are advised to consult their legal counsel prior to accepting any provisional allotment of Equity Shares,
applying for excess Equity Shares or making any offer, sale, resale, pledge or other transfer of the Rights
Entitlements or the Equity Shares.

This Letter of Offer and its accompanying documents will be supplied to you solely for your information and may
not be reproduced, redistributed or passed on, directly or indirectly, to any other person or published, in whole or
part, for any purpose.

Each person who exercises the Rights Entitlements and subscribes for the Equity Shares, or who purchases the
Rights Entitlements, or Equity Shares shall do so in accordance with the restrictions in their respective
jurisdictions.

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 SECTION VIII – SATUTORY AND OTHER INFORMATION

MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION

The copies of the following material documents and contracts (not being contracts entered into in the ordinary
course of business carried on by our Company or entered into more than two years prior to the date of this Letter
of Offer) which are or may be deemed material have been entered or are to be entered into by our Company.
Copies of the documents for inspection referred to hereunder, may be inspected at the Registered and Corporate
Office between 10 a.m. and 5 p.m. on all working days from the date of the Letter of Offer until the Issue Closing
Date.

I. Material Contracts for the Issue

1. Memorandum of Understanding dated August 19, 2024, between our Company and Lead Manager.

2. Registrar Agreement dated July 16, 2024, entered into amongst our Company and the Registrar to the
Issue.

3. Banker to the Issue Agreement dated September 18, 2024, entered amongst our Company, the Registrar
to the Issue, and the Banker to the Issue.

II. Material Documents

1. Certified copies of the updated Memorandum of Association and Articles of Association of our Company
as amended from time to time.

2. Certificate of Incorporation dated November 09, 1993, and fresh certificate of incorporation consequent
to conversion from private to public company dated July 25, 1998, and change of name dated November
26, 2013.

3. Certificate of Registration from Reserve Bank of India dated July 20, 1999.

4. Scheme of Amalgamation entered between Canopy Finance Limited, and our Company dated February
15, 2024.

5. Order dated February 15, 2024, passed by the Hon’ble NCLT at Mumbai Bench sanctioning the Scheme
of Amalgamation.

6. No Objection Certificate issued by Reserve Bank of India dated January 05, 2023, to the Scheme of
Merger by Absorption of Canopy Finance Limited by our Company.

7. Resolution of the Board of Directors of our Company dated June 20, 2024, approving the Rights Issue.

8. Resolution of the Finance Committee of our Company dated August 21, 2024, approving the Draft Letter
of Offer.

9. Resolution of the Finance Committee of our Company dated September 20, 2024, for approving the
Letter of Offer.

10. Consent of our Directors, Company Secretary and Compliance Officer, Statutory Auditor, Legal Advisor,
the Registrar to the Issue, Banker to the Issue/ Refund Bank for inclusion of their names in the Letter of
Offer in their respective capacities.

11. Copy of the Annual Report of our Company for the financial year ended March 31, 2024, March 31,
2023, and March 31, 2022.

12. The Restated Financial Statements for the year ended March 31, 2024, along with report dated June 27,
2024, of the Statutory Auditor thereon, included in this Letter of Offer.

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13. The Unaudited Interim Financial Information for the three (3) months periods ended June 30, 2024 with
Limited review Report.

14. Data / Reports related to Industry Overview.

15. Deployment certificate dated August 21, 2024, issued by the Statutory Auditor.

16. Statement of Tax Benefits dated August 21, 2024, from the Statutory Auditor included in this Letter of
Offer.

17. Consent letter dated July 12, 2024, from the Statutory Auditor for inclusion of their name as expert, as
defined under Section 2(38) of the Companies Act, in this Letter of Offer.

18. Copy of Tripartite Agreement between the Company, RTA and NSDL dated March 13, 2020.

19. Copy of Tripartite Agreement between the Company, RTA and CDSL dated July 13, 2022.

20. Memorandum of Understanding with Share Transfer Agent dated March 06, 2024.

21. SEBI Letter No. SEBI/HO/CFD/CFD-RAC-DCR2/P/OW/2024/0000018222/1 dated May 31, 2024,

granting relaxation from the applicability of Rule 19(2)(b) of the Securities Contract Regulation (Rules)
1975 for listing of Shares of Purple Finance Limited.

22. In-principle listing approval dated September 13, 2024, from the BSE.

23. In-principle listing approval dated September 17, 2024, from the CSE.

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 DECLARATION

I hereby declare that all relevant provisions of the Companies Act, 2013 and the rules, regulations and guidelines
issued by the Government of India, or the rules, regulations or guidelines issued by the SEBI, established under
Section 3 of the Securities and Exchange Board of India Act, 1992, as the case may be, have been complied with
and no statement made in this Letter of Offer is contrary to the provisions of the Companies Act 2013, the
Securities Contracts (Regulation) Act, 1956, the Securities Contract (Regulation) Rules, 1957 and the Securities
and Exchange Board of India Act, 1992, each as amended, or the rules, regulations or guidelines issued
thereunder, as the case may be. I further certify that all the statements and disclosures made in this Letter of Offer
are true and correct.

SIGNED BY THE DIRECTOR OF OUR COMPANY

Sd/-

Amitabh Chaturvedi
Executive Chairman

Date: September 20, 2024

Place: Mumbai

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 DECLARATION

I hereby declare that all relevant provisions of the Companies Act, 2013 and the rules, regulations and guidelines
issued by the Government of India, or the rules, regulations or guidelines issued by the SEBI, established under
Section 3 of the Securities and Exchange Board of India Act, 1992, as the case may be, have been complied with
and no statement made in this Letter of Offer is contrary to the provisions of the Companies Act 2013, the
Securities Contracts (Regulation) Act, 1956, the Securities Contract (Regulation) Rules, 1957 and the Securities
and Exchange Board of India Act, 1992, each as amended, or the rules, regulations or guidelines issued
thereunder, as the case may be. I further certify that all the statements and disclosures made in this Letter of Offer
are true and correct.

SIGNED BY THE DIRECTOR OF OUR COMPANY

Sd/-

Rajeev Deoras
Executive Director

Date: September 20, 2024

Place: Mumbai

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 DECLARATION

I hereby declare that all relevant provisions of the Companies Act, 2013 and the rules, regulations and guidelines
issued by the Government of India, or the rules, regulations or guidelines issued by the SEBI, established under
Section 3 of the Securities and Exchange Board of India Act, 1992, as the case may be, have been complied with
and no statement made in this Letter of Offer is contrary to the provisions of the Companies Act 2013, the
Securities Contracts (Regulation) Act, 1956, the Securities Contract (Regulation) Rules, 1957 and the Securities
and Exchange Board of India Act, 1992, each as amended, or the rules, regulations or guidelines issued
thereunder, as the case may be. I further certify that all the statements and disclosures made in this Letter of Offer
are true and correct.

SIGNED BY THE DIRECTOR OF OUR COMPANY

Sd/-

Minal Chaturvedi
Non-Executive Non-Independent Director

Date: September 20, 2024

Place: Mumbai

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 DECLARATION

I hereby declare that all relevant provisions of the Companies Act, 2013 and the rules, regulations and guidelines
issued by the Government of India, or the rules, regulations or guidelines issued by the SEBI, established under
Section 3 of the Securities and Exchange Board of India Act, 1992, as the case may be, have been complied with
and no statement made in this Letter of Offer is contrary to the provisions of the Companies Act 2013, the
Securities Contracts (Regulation) Act, 1956, the Securities Contract (Regulation) Rules, 1957 and the Securities
and Exchange Board of India Act, 1992, each as amended, or the rules, regulations or guidelines issued
thereunder, as the case may be. I further certify that all the statements and disclosures made in this Letter of Offer
are true and correct.

SIGNED BY THE DIRECTOR OF OUR COMPANY

Sd/-

NameAjAjay Kumar Pandey

Non-Executive Independent Director

Date: September 20, 2024

Place: Mumbai

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 DECLARATION

I hereby declare that all relevant provisions of the Companies Act, 2013 and the rules, regulations and guidelines
issued by the Government of India, or the rules, regulations or guidelines issued by the SEBI, established under
Section 3 of the Securities and Exchange Board of India Act, 1992, as the case may be, have been complied with
and no statement made in this Letter of Offer is contrary to the provisions of the Companies Act 2013, the
Securities Contracts (Regulation) Act, 1956, the Securities Contract (Regulation) Rules, 1957 and the Securities
and Exchange Board of India Act, 1992, each as amended, or the rules, regulations or guidelines issued
thereunder, as the case may be. I further certify that all the statements and disclosures made in this Letter of Offer
are true and correct.

SIGNED BY THE DIRECTOR OF OUR COMPANY

Sd/-

Sumeet Sandhu
Non-Executive Independent Director

Date: September 20, 2024

Place: Mumbai

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 DECLARATION

I hereby declare that all relevant provisions of the Companies Act, 2013 and the rules, regulations and guidelines
issued by the Government of India, or the rules, regulations or guidelines issued by the SEBI, established under
Section 3 of the Securities and Exchange Board of India Act, 1992, as the case may be, have been complied with
and no statement made in this Letter of Offer is contrary to the provisions of the Companies Act 2013, the
Securities Contracts (Regulation) Act, 1956, the Securities Contract (Regulation) Rules, 1957 and the Securities
and Exchange Board of India Act, 1992, each as amended, or the rules, regulations or guidelines issued
thereunder, as the case may be. I further certify that all the statements and disclosures made in this Letter of Offer
are true and correct.

SIGNED BY THE DIRECTOR OF OUR COMPANY

Sd/-

Amit Sonawala
Non-Executive Independent Director

Date: September 20, 2024

Place: Mumbai

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